The photography pioneer recorded a loss of $111 million, or 41 cents per share, in the third quarter, compared with a profit of $101 million, or 35 cents per share, a year earlier. By comparison, Kodak lost $189 million in the second quarter and $353 million in the first quarter.
Sales of digital cameras, film, printers and other products tumbled 26 percent, to $1.78 billion from $2.41 billion, missing analysts' forecast of $1.89 billion. On a sequential basis, sales were roughly flat.
While the July-September period illustrated the difficulties still facing Kodak as consumers hold off on purchases, the company said it was especially encouraged by robust sales of its consumer inkjet printers as well as rising orders for commercial inkjet printers that hit the market early next year.
"In the third quarter, we began to see real evidence that the market trends are positive," CEO Antonio Perez said in a call with analysts. "Our top line is stabilizing and our business is beginning to improve. ... We are on track for a much improved fourth quarter."
Kodak traditionally benefits from a bump in holiday season sales, from October through December. Perez said the company hopes for a "modest improvement" in its markets and that its new, higher-margin digital cameras and devices will click with consumers.
In the third quarter, Kodak posted several charges and gains, totaling 18 cents per share, mainly related to restructuring, asset sales and taxes. Excluding these items, Kodak lost $63 million, or 23 cents a share. On that basis, analysts surveyed by Thomson Reuters expected a loss of 19 cents per share.
Revenue from digital businesses plunged 26 percent to $1.21 billion and traditional film-based revenue fell 25 percent to $572 million.
Sales of its consumer inkjet hardware and ink products more than doubled in the third quarter, however, while customer commitments for its Prosper commercial printers "continue to grow rapidly," Perez said.
In 2009, Kodak aims to double to more than 2 million the number of inkjet printers sold to consumers. Yet that business isn't expected to become profitable until 2011. The company estimates that consumer inkjet overall is a $50 billion market.
As its film and photofinishing businesses have struggled, Kodak has tapped its inkjet expertise and splurged on acquisitions. It hopes to grab a stake in markets where Hewlett-Packard, Ricoh, Xerox, and Fuji also are doing battle.
Kodak has been cutting thousands of jobs as it undergoes a transition from film to digital imaging. The 128-year-old Rochester, N.Y., company spent $3.4 billion and pared its payroll from 64,000 to 26,900 from 2004 to 2007. It is eliminating up to 4,500 jobs this year, shrinking its work force to around 20,000 from a 1988 peak of 145,300.
And while analysts said the company is starting to see some benefits from cutting costs, some challenges remain.
"Cost-cutting initiatives _ and this is the case with a lot of companies right now _ are starting to show some benefit, so that is a positive," said Shannon Cross of Cross Research in Livingston, N.J. "They did a good job of managing working capital, which helped cash flow. But in general Kodak remains kind of a transaction-oriented business, so if people aren't buying things, there's going to be pressure."
She added that "it's a very tough time" for Kodak to try to carve out a high-profit niche in inkjet printing to replace plummeting film sales. "Printing businesses tend to need strong, established bases to support them and they're still in their early stages of building their installed base."
For the full year, Kodak now expects its total revenue decline rate to be at the high end of a previously forecasted range of 12 percent to 18 percent. That is due in part to results so far this year and the company's increased focus on cash and earnings, it said.
Kodak said it generated $29 million in cash before restructuring payments as opposed to burning up $78 million in cash in last year's third quarter.
Its consumer digital-imaging division absorbed an $89 million operating loss in the quarter compared with a year-ago profit of $24 million as sales slumped 35 percent to $535 million.
Hurt by a softer commercial-printing market, the graphic-communications division's operating profit dipped to $10 million from $18 million as sales fell 18 percent to $674 million.
The film, photofinishing and entertainment unit had an operating profit of $47 million, down from $77 million a year earlier.
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