Kodak’s figures for the first quarter of 2014 show a net loss of $36 million. In contrast, the previous year Kodak earned $283 million, though this included Other Operating Income, net of $494 million, primarily from a gain of $535 million from the sale of the digital imaging patent portfolio.
Sales for the first quarter of 2014 were $482 million, compared to $594 million in the prior-year quarter, a decline of 19%, more than half attributable to continuing declines in the film and consumer inkjet products. In addition, non-recurring licensing revenue was $24 million lower than in the first quarter of 2013.
Jeff Clarke, Kodak’s Chief Executive Officer. blamed the results on “steep declines in our mature businesses,” adding: “We saw significant increases in sales for our key new products in packaging, digital printing and digital plates, as increasing numbers of customers embraced our solutions.”
Clarke noted the company’s strong liquidity, with cash of $809 million exceeding debt of $677 million, or by more than $130 million, provides flexibility to continue investing in the business to support future growth.
Kodak is split into two divisions: Graphics, Entertainment & Commercial Films (GECF) and Digital Printing & Enterprise (DP&E). The GECF division saw revenue fall from $386 million in Q1 2013 to $316 million this year, a drop in profits from $85 million to $29 million, which Kodak has mainly blamed on eduction in motion picture film and one-time licensing revenue.
The DP&E division reported revenue dropping from $197 million dollars last year to $166 million this year, with profit falling from $52 million in Q1 last year to $42 million this year, of which nearly two-thirds of the decline was related to lower sales in the Consumer Inkjet business.
Kodak’s future plans seem to rely its Prosper inkjet and Flexcel NX flexo systems. Kodak has had some success with its Prosper S-Series Imprinting Systems, which it hopes to grow by one-third to more than 1,000 this year. However, its ambitions for the Prosper presses are to increase the worldwide number of installations to “more than 40 during 2014”, which is about a third of HP’s current number of installed T-series inkjet presses, the main rival to the Prosper presses.
Kodak hopes that placements of its Flexcel NX Systems in the packaging industry will increase by more than 25% to more than 400 units, though even Kodak recognises that this is way over the industry average.
It’s worth reflecting that while Kodak, arguably one of the giants in digital printing, has made a loss, Heidelberg, which is primarily a conventional press manufacturer, yesterday announced its return to profitability. Go figure!