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Earnings Preview-Eastman Kodak

Mon, 07/26/2010 - 8:13am
BEN DOBBIN - AP Business Writer - Associated Press

Eastman Kodak Co., the maker of cameras, film and printers, reports its second-quarter results before the stock market opens Wednesday.

WHAT TO WATCH FOR: A modest 2 percent rise in digital camera sales and a slowdown in the erosion rate of U.S. film sales. Deutsche Bank analyst Chris Whitmore expects the remade photography pioneer to benefit from a bump in motion-picture film sales as Hollyood attracts financing for a growing number of movies.

Analysts are concerned that profit margin pressures could bring a downward revision in the company's full-year earnings estimates.

Based in Rochester, N.Y., Kodak eliminated 4,100 jobs in 2009, shrinking its work force to 20,300, the smallest since the 1930s. It is banking on replacing the huge profits it once made from film with ink revenue from promising new lines of digital inkjet printers for both consumer and commercial markets.

Kodak is relying on leaner costs, licensing fees from digital-imaging inventions, and film revenue as it battles to complete a long-drawn-out digital transformation.

Kodak broke a run of four quarterly losses with net income of $443 million in the last three months of 2009. It also earned $119 million in the first quarter of this year, lifted by inkjet printer sales and a one-time, $550 million settlement deal with Samsung Electronics Co. over disputed digital-imaging technology.

WHY IT MATTERS: A bump in sales of cameras and printers might provide signs that Kodak is making steady gains as the economy recovers as well as reflect a potential upswing in consumers' disposable income.

WHAT'S EXPECTED: Analysts polled by Thomson Reuters, whose estimates typically exclude one-time items, expect Kodak to lose 31 cents per share on revenue of $1.69 billion.

LAST YEAR'S QUARTER: Kodak lost $189 million as the global economic downturn battered sales of digital cameras, film and other photography products. Sales plunged 29 percent to $1.77 billion.

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On the Net: www.kodak.com

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