Kodak Swings to Profit on Strong Digital Sales, Gross Margin

Eastman Kodak reported a return to profitability in its latest quarter despite a slight reduction in net sales. CEO Antonio M. Perez was "very pleased" with the way the "new Kodak" is emerging: "We delivered solid, value-creating digital growth, powered by a 12% increase in digital revenue, as well as expanded gross margins and positive net earnings. This increases my confidence in achieving our full-year goals and positions us well as we enter 2008," (full earnings call transcript later today). Q3 net income was $37 million, good for EPS of $0.13, mirroring a year ago's net loss of $37 million and negative EPS of $0.13. Revenue was $2.58 billion, versus $2.6 billion a year ago. Earnings from continuing operations showed a drastic improvement at EPS of $0.12, versus an EPS loss of $0.29 on that basis a year ago. More specifically, digital sales climbed 12% to $1.59 billion, offsetting a 16% drop in more traditional revenue streams to $986 million. Gross margin was up 1.3% to 26.4%, while overall costs were hemmed in 8%. Shares were higher by 2.3% in moderate pre-market trading (23,000 shares as of 8:18 AM ET) despite missing consensus adjusted EPS estimates of $0.24. Consensus revenue estimates were for $2.49 billion. Kodak reiterated its EPS guidance for FY2007, in addition to exuding confidence towards FY2008.

Sources: Press release, Wall Street Journal, MarketWatch, Reuters, AP
Commentary: Paul Wick: Slumping Bill Miller Will Go And Kodak Will Fall • Kodak Swings to a Q2 Profit on Growing Digital Strength • Kodak Shares Gain on HP Buyout Rumor; Why Would Hurd Do That? Stocks/ETFs to watch: EK. Competitors: FUJI, CAJ, SNE
Earnings call transcript: Eastman Kodak Q2 2007 Earnings Call Transcript

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Comments

[Burns:]

The Directors are to be commended for the job they did here www.newsvisual.com/new... . Just a few years ago people were writing off this company as obsolete. If rumors of a supposed Kodak-HP merger ever happen, this company will once again be one of the premier companies in the world.

2007 Nov 01 07:10 PM