Eastman Kodak Co on Friday posted a wider-than-expected first-quarter loss as cost-cutting failed to outpace a decline in digital photography sales, sending its stock down nearly 6 percent.
The world's top maker of photographic film also cut its forecast for 2007 earnings from digital products and printing services, a vital growth area. Kodak has said it is in the last year of a costly transformation to digital as its traditional film business declines.
In its first report since Kodak completed the $2.35 billion sale of its profitable health imaging business, the company said its net loss had narrowed to $151 million, or 53 cents a share, from $298 million, or $1.04 a share, a year earlier.
Excluding restructuring costs and other special items, the loss from continuing operations was 35 cents a share, worse than even the most pessimistic analyst's estimate.
The average expectation was for a loss of 5 cents a share, but forecasts had varied widely, from a 21-cent loss to an 8-cent profit, according to Reuters Estimates.
"From an operational standpoint, the earnings were weak," said analyst Shannon Cross of Cross Research. "They benefited from restructuring, (but) it look like there was significant pressure on the digital camera business." Revenue fell 8 percent to $2.11 billion from $2.29 billion. Digital revenue fell 3 percent to $1.21 billion. Global sales in the digital capture and devices segment, which includes cameras, memory products, snapshot printers, and intellectual property royalties, dropped 20 percent.
Kodak also trimmed its forecast of full-year digital earnings from operations to a range of $150 million to $250 million from a previous outlook of $200 million to $300 million.