Eastman Kodak on Wednesday reported its first quarterly profit in two years, as the company showed progress in moving its business from traditional to digital photography.
The Rochester, N.Y., company said earnings in the fourth quarter ended Dec. 31 were $17 million, or 6 cents a share, compared with a loss of $137 million, or 48 cents a share, during the same period a year ago. Revenues, however, fell by 9% to $4.2 billion.
Nevertheless, earnings growth in the company's digital business for the full year exceeded the decline in profits for its traditional film operations for the first time, the company said. Digital earning for 2006 reached $343 million, an increase of $271 million over 2005.
The onetime icon in the U.S. photography industry ended its eight-quarter string of losses through an ongoing reduction in expenses, including layoffs and closing facilities, and improved profits in the digital market.
"I am extremely pleased with our performance in 2006 and our progress in implementing our digital business model," Antonio M. Perez, chairman and chief executive for Kodak, said in a statement. "Our digital earnings greatly exceeded traditional earnings in the fourth quarter."
Digital earnings for the quarter increased to $271 million from $130 million a year ago. Digital revenues from quarter, however, declined by 5 percent to $2.6 billion, which the company said was consistent with its focus on improving digital profit margins. Traditional revenue, on the other hand, fell 15 percent to $1.4 billion.
"We delivered on every important goal that we set, with the exception of digital revenue growth, where we made a specific decision to focus on overall digital profit margins over revenue growth," Perez said.
Kodak launched its multi-billion-dollar restructuring in January 2004. As an example of the extent of the overhaul, the company last August handed over manufacturing, distribution and some design work for its consumer digital cameras to Flextronics International Ltd. It was the first time Kodak would not make its own cameras since founded by George Eastman in 1880.