Kodak Reports Larger Net Loss on Lower Revenue

Eastman Kodak reported that it has made continued performance improvement in segment profitability during the third quarter of 2012. This improvement was the result of a tightened focus on the company’s most profitable customer accounts and businesses and a substantial reduction in costs.

Kodak’s revenue of $1.018 billion in the third quarter represented a decline of 19 percent from the year-ago quarter. This reduction reflects strategic decisions to focus on profitable businesses and accounts, lower sales of traditional products, unfavorable foreign exchange impact, and soft industry demand as a result of the broader economic downturn in some businesses and regions.

The company’s net loss for the quarter totaled $312 million. Excluding restructuring and reorganization costs, the loss would have narrowed to $139 million, an improvement of $66 million over the prior-year quarter.

“Since our Chapter 11 filing in January, we have focused on the businesses that are core to our future strategic direction and exited businesses that were unprofitable,” said Antonio M. Perez, chairman and CEO. “The actions we are taking in response to economic and market conditions are working and will position us to emerge in 2013 as a growing, profitable, sustainable company.”

The company’s focus on cost reductions and profitability resulted in a decrease in selling, general and administrative expenses of $63 million, a 24 percent reduction from the same period in the prior year.

The segment operating loss for the third quarter was $37 million, an $87 million improvement from the prior year. The company’s gross profit margin increased by 2 percentage points.

On a GAAP basis, the third-quarter loss from continuing operations before interest expense, other income (charges), net, reorganization items, net and income taxes was $193 million, compared to the prior year quarter loss of $167 million. Excluding restructuring costs, the operating loss was $76 million.

The company’s worldwide cash balance was $1.13 billion at the end of the third quarter. It has submitted to the U.S. Bankruptcy Court for approval an agreement with the Official Committee of Retired Employees that will substantially reduce the company’s payments for non-pension benefits for U.S. retirees, beginning in 2013, an action that would save the company about $100 million in cash expenditures next year (prior to reduction for appropriate expenses related to the agreement).

Source: Kodak.