Kodak's print business profits take a tumble

Higher aluminium costs and workflow sales contributed to a dip in Kodak's print business profits.

Kodak reported second quarter figures of $880 million for its graphic communications group, a five per cent increase from the year-ago quarter. However, earnings from operations for the segment were not as strong, coming in at $13 million, a $16 million drop compared with earnings of $29 million in the year-ago quarter.

In a statement issued by the company, Kodak listed the higher cost of aluminium, seasonality in equipment and workflow sales associated with drupa and increased investment in the company's digital printing business as a contributing factor to this demise.

CEO, Antonio Perez, (pictured) said that he feels confident of Kodak's digital franchise leading the group in the right direction.

"We are increasing the projected volumes for our customer inkjet printers for 2009 and pulling forward by three-to-six months the delivery date of our new Stream inkjet technology for commercial printers," he said.

"The more we develop these opportunities, the more we see the value in investing to accelerate growth."

For 2008, Kodak remains focused on three key financial metrics, as it transforms itself into a growing company with sustained profitability: revenue growth, driven by digital businesses, earnings from continuing operations, and cash generation.

The company today provided an updated outlook for 2008 performance against these metrics, as a result of recent significant increases in commodity costs on a worldwide basis, the impact of pricing and actions that the company is taking to increase productivity in response to these increased costs, and the previously announced benefit to depreciation expense from lengthening the useful life assumptions of its film and paper manufacturing assets.

Kodak continues to forecast total company revenue growth in the range of zero to 2 per cent and digital revenue growth in the range of 7 to 10 per cent.