Eastman Kodak Co.’s four-year digital overhaul appears to have worked with the company reporting $37 million profit in the third quarter yesterday
The results show digital revenue almost tripling with profit margins widening, despite a slight drop in overall sales.
Landmark
“I am very pleased with our third-quarter performance, which represents a milestone in the emergence of the new Kodak,” said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company.
“We delivered solid, value-creating digital growth, powered by a twelve percent increase in digital revenue, as well as expanded gross margins and positive net earnings. This increases my confidence in achieving our full-year goals and positions us well as we enter 2008.”
“Our relentless focus on digital business model innovation and the dramatic operational improvements we have achieved over the past four years have created a solid foundation for our future,” said Perez. “We have the right talent, business structure, technology, brand, and growing product portfolio to generate sustainable, profitable growth and significant value for our shareholders.”
One-off?
But analyst Shannon Cross of Cross Research in Short Hills, N.J., cautioned that operating profits in the quarter were driven by "leveraging cost-cutting in the film business" and one-time royalty payments from digital-camera technology.
"It's still difficult to determine what the long-term, core operating profit of this company will be,” she said. “Because we're not going to really know for a couple of years the scope of the investments they're making right now in things like inkjet printers and CMOS (image sensors in digital cameras)."
November 2, 2007