Eastman Kodak posted a wider-than-expected first-quarter loss as cost-cutting failed to outpace a decline in digital photography sales, sending its stock down nearly 6%.
The world's top maker of photographic film also cut its forecast for 2007 earnings from digital products and printing services, a vital growth area. Kodak has said it is in the last year of a costly transformation to digital as its traditional film business declines.
In its first report since Kodak completed the $2.35 billion sale of its profitable health imaging business, the company said its net loss had narrowed to $151 million, or 53 cents a share, from $298 million, or $1.04 a share, a year earlier.
Excluding restructuring costs and other special items, the loss from continuing operations was 35 cents a share, worse than even the most pessimistic analyst's estimate.
The average expectation was for a loss of 5 cents a share, but forecasts had varied widely, from a 21-cent loss to an 8-cent profit, according to Reuters Estimates.
"From an operational standpoint, the earnings were weak," said analyst Shannon Cross of Cross Research. "They benefited from restructuring, (but) it look like there was significant pressure on the digital camera business."
Revenue fell 8% to $2.11 billion from $2.29 billion.
Digital revenue fell 3% to $1.21 billion. Global sales in the digital capture and devices segment, which includes cameras, memory products, snapshot printers, and intellectual property royalties, dropped 20%.
Kodak also trimmed its forecast of full-year digital earnings from operations to a range of $150 million to $250 million from a previous outlook of $200 million to $300 million.
The company kept its forecast for 2007 digital revenue growth at 3% to 5%, with total 2007 revenue off 4% to 7%.
Since late 2003, Kodak has been beefing up its digital camera and photography products, hoping to outpace the decline in demand for film, historically its main revenue source. At the same time, it is shrinking its costs by cutting jobs and trimming manufacturing assets.
Under the the reorganization, first announced late in 2003, Kodak plans total job cuts of 28,000 to 30,000.
The company's shares have vacillated between $20 and $30 over the past two years.