For the first time, Eastman Kodak Co. is generating more sales from digital imaging than from film-based photography, yet that change resulted in a $1.03 billion loss in the third quarter largely due to one-time tax charges.
Even excluding restructuring and other charges, analysts said Kodak's results missed Wall Street forecasts. Its stock dropped $1.27, or 5.5 percent, to $21.87 in midday trading Wednesday on the New York Stock Exchange after tumbling earlier to $20.91, its lowest level since September 2003.
Kodak lost the equivalent of $3.58 a share in the July-September quarter, compared with a profit of $458 million, or $1.60 a share, a year ago. Its loss from continuing operations, excluding one-time charges, was $103 million.
Sales rose 5 percent to $3.55 billion, up from $3.37 billion in last year's third quarter.
Despite the losses, Kodak's overall digital sales in the quarter surged 47 percent to $1.89 billion, while revenues from film, paper and other traditional, chemical-based businesses dipped 20 percent to $1.66 billion.
"This is an important milestone in our transformation journey," Kodak's chief executive, Antonio Perez, said in a conference call with analysts. "We're building a strong digital company for the future."
The quarterly loss, Kodak's third in a row, included a non-cash charge of $900 million, or $3.13 a share -- an accounting requirement directly related to its huge overhaul. In July, Kodak disclosed plans to lay off 10,000 employees on top of 12,000 to 15,000 job cuts targeted in January 2004.
Kodak warned last month that a sluggish economy and delays in medical-imaging installations would likely crimp its digital profits this year, forcing it to build fewer digital cameras and home printers for the end-of-year holiday season. It had projected profits of around $275 million to $325 million.