Kodak struggling in tight market

Eastman Kodak Co posted a much bigger-than-expected quarterly loss as digital camera sales slumped and its film processing business suffered from the loss of a key customer, sending sending shares lower.

The company, whose health is hard to peg as it winds down its film business while investing in printing, saw sales in its growth businesses of digital photography and printing slide 6 percent, compounding a 21 decline in its film and photofinishing unit.

"Kodak's business remains under pressure from the economy and increased competition," said Cross Research analyst Shannon Cross.

"The company noted that the loss of a major photo kiosk contract - Walmart - impacted the consumer business while entertainment film declined ... driven by the economy and proliferation of 3-D digital cinema."

Kodak, which last earned an annual profit in 2004, said its second quarter net loss was US$168 million ($233.9 million), or 63 cents a share, compared with a year-earlier loss of US$189 million, or 70 cents a share.

Excluding special items, Thomson Reuters I/B/E/S calculated the loss to be 51 cents a share, compared with an analyst consensus estimate of 32 cents a share.

Kodak's revenue declined 11 percent to US$1.57 billion from US$1.77 billion one year earlier, and fell short of analysts view of US$1.67 billion.

The company said revenue from digital commercial printing grew in the second quarter. Still, investors have frowned on the stock recently as they continue to seek signs that its lengthy, expensive restructuring is on a path toward profitability.

Shares of Kodak slipped 3.2 percent to US$4.77 in premarket trading. The stock has tumbled 43 percent in the past three months, but is still up about 19 percent for the year.

- Reuters