Eastman Kodak Co on Tuesday posted a wider second-quarter net loss and cut its full-year revenue outlook, sending its shares down 7.5 percent, as the top maker of photographic film found its shift to digital products more difficult than expected.
The company also said Flextronics International Ltd would manufacture its consumer digital cameras. Citing an ongoing push to increase sales of its more-profitable digital cameras and other products, Kodak said it expected revenue to decline by about 3 percent this year. In January, it had said full-year sales would show anywhere from a decrease of 2 percent to a rise of 4 percent.
Since late 2003, Kodak has been beefing up its digital products, hoping to outpace the decline in demand for film, historically its main revenue source. At the same time, it is shrinking its costs by cutting up to 25,000 jobs and trimming manufacturing assets.
The second-quarter net loss widened to $282 million, or 98 cents a share, from $155 million, or 54 cents a share, a year earlier. Excluding one-time costs from restructuring, inventory and other special items, the loss was 19 cents a share. Analysts were expecting a profit of 22 cents a share, according to Reuters Estimates.
In a statement, Kodak Chief Executive Antonio Perez said the company was "coming into the final stages of (its) digital transformation. "By the end of next year the majority of the restructuring costs will be behind us and Kodak will be positioned for sustained success in digital markets," he said.
The Rochester, New York-based company said revenue fell 9 percent to $3.36 billion. Global sales of consumer digital products such as cameras, accessories, memory products and imaging sensors, declined 15 percent, primarily reflecting volume decreases and lower prices.
Kodak said it would stop making digital cameras, with Flextronics now handling all manufacturing of those products. Kodak, which in 2004 stopped selling traditional film cameras in the United States, Canada and Western Europe, will focus instead on the digital cameras' design and sales. About 550 jobs will move to Flextronics, Kodak said.