Digital sales the ray of light for struggling giant

Sales reached US$5.54 billion for Kodak during the final quarter of 2005, up 12 per cent from the same time last year. Digital revenue rose 45 per cent to reach $3.5 billion. Digital sales for 2005 came in at 54 per cent of total revenue, marking the first time for the company that digital has eclipsed traditional revenue.

The net loss for Kodak came in at $68.64 million during the final quarter, a big improvement over its third-quarter loss of $1.36 billion.

Steve Green, managing director of the Kodak GCG in Australia and New Zealand, claims he is pleased with how the group performed in the region.

“This is especially true when you consider that we began the year with separate budgets, and finished it with them all rolled into one,” says Green. “We're starting the new year with the all the separate parts of the GCG brought together, and we're ready for an 'integrated' 2006.”

Green attributes Kodak's massive loss for the year, clocking in at over $1.8 billion for the company, to its transition into a digital business.

“While we're moving quickly into the digital world, the analogue world is declining quicker than anyone expected,” says Green. “However, with the transition nearly complete, I think we are well placed to be moving back into profit into the near future.”

Sales for the Graphic Communications Group during the fourth quarter came in at $1.24 billion, a rise of 141 per cent that largely reflects the acquisition of KPG and Creo, as well as a 38 per cent boost in Kodak Versamark sales.

When discussing the predicted outcome for 2006, Kodak claims it expects digital revenue to grow between 16 and 22 per cent, with overall revenue growth to lie somewhere between a drop of two per cent and a rise of four per cent.

Antonio Perez, CEO of Eastman Kodak, claims the company has entered 2006 with solid momentum and a stronger emphasis on profitable growth.

“We are now more than halfway through our transformation, and we have proven our ability to drive sales in digital markets and to generate the cash necessary to fund our growth," says Perez.

“Our focus this year – beyond digital revenue growth and cash generation – will be expanding the margins of our digital businesses, now that we've amassed the scale necessary to be a market force.”