Stronger Sales Lift Kodak Profits

Friday, July 21st 2000, 12:00 am
By: News On 6

ROCHESTER, N.Y. (AP) — Lifted by stronger U.S. film sales, second-quarter profits rose 3 percent at Eastman Kodak Co., meeting Wall Street expectations.

The world's biggest photography company said Friday its second-quarter earnings were $506 million, or $1.62 a share. Excluding one-time factors, profits rose 4.5 percent to $513 million, or $1.65 a share.

In the same period last year, profits totaled $491 million, or $1.52 a share.

The report matched most Wall Street forecasts, according to a survey by First Call/Thomson Financial, but Kodak's stock was down $1.563 per share at $58.313 by late morning on the New York Stock Exchange.

After a flat first quarter, sales rose 4 percent to $3.749 billion, up from $3.61 billion in the second quarter of 1999.

Kodak said revenues from consumer film, cameras and photofinishing rose 12 percent in the United States and 6 percent worldwide during the quarter, with higher volumes offsetting the negative impact of a strong U.S. dollar in Europe.

But while U.S. film sales jumped 11 percent on a volume basis, Kodak's market share slipped 1 percent.

Kodak, which accounts for about two out of every three rolls of film sold on its home turf, has been determined to avert a repeat of the market-share inroads made by Fuji in 1997. Caught off-guard when the Japanese rival slashed film prices, Kodak was forced to cut nearly 20,000 jobs, or one-fifth of its worldwide payroll.

Second-quarter sales in emerging markets accelerated 13 percent in the quarter, helped by robust showings in China, Russia and Latin America.

Kodak also continued to benefit from narrowing losses in its digital photography business and companywide cost savings.

Losses in digital photography, the recording of images on computer chips, totaled $6 million in the quarter, down from $28 million a year ago. Digital products revenues totaled $725 million, accounting for 19 percent of overall sales, Kodak said without disclosing year-ago figures for comparison.

Chief executive Dan Carp said Kodak remained on track to deliver sales growth of between 6 percent and 7 percent in 2000. Carp took over Jan. 1 from George Fisher, who stepped down as CEO after a turbulent six-year reign. Fisher is staying on as chairman until Dec. 31.

For the first six months of the year, Kodak earned $795 million, or $2.55 per share, up from $682 million, or $2.11 per share, in the same period last year. Sales rose to $6.84 billion from $6.71 billion.