Kodak optimistic despite $21m loss

Kodak has released its financial figures for the third quarter of this year, which show a net loss of $21m, which is all the worse considering that the company made a net profit of $19m in the same period last year.

Despite this, Kodak reported growth in some of its main product areas, with the Sonora process-free plates up 41 percent in volume, and the Flexcel NX flexo plates up 32 percent in volume. Nonetheless, when companies quote figures by volume it usually means that the value has not increased so dramatically. However, Kodak has said that the revenue for its Prosper inkjet portfolio has increased by 27 percent.

The company has blamed its losses on adverse currency exchange together with lower than expected revenues from its legacy consumer inkjet printer cartridge sales. Also, last year’s figures were artificially boosted by a one-time gain of $52 million from patent licenses in the third quarter of 2014. When adjusted for foreign exchange and these items, revenues decreased 4% year over year.

The figure make for somber reading yet there are glimmers of hope. Thus the Enterprise Inkjet Systems Division saw revenues fall from $42m to $39m, yet the earnings before interest, taxes, depreciation, and amortization, or EBITDA, show a loss of $4m, which is an improvement on the $12m loss of the previous year, suggesting that the restructuring is paying off. Equally, revenues remained static at the Micro 3D Printing and Packaging Division at $32m, but earnings rose from $1m to $5m, mainly due to selling higher volumes of the Flexcel NX plates.

The Consumer Film Division continues to decline, which is to be expected. Revenues dropped from $92m to $64m, though earnings fell at a lower rate, from $24m to $12m.

But the main worry will be with Kodak’s largest division, Print Systems, which saw revenues fall 13 percent from last year to $278m this quarter, producing EBITDA revenues of $28 million, down from $31 million in the same period a year ago with no real explanation.

John McMullen, Kodak Chief Financial Officer, claims that the majority of the company’s restructuring has now been completed, adding: “We have substantially reduced our cost structure and are in line to achieve a greater than $100 million improvement in 2015.”

Jeff Clarke, Kodak’s Chief Executive Officer, added: “I’m pleased with the strong growth of our strategic product lines. Further, Kodak is on track to improve comparable operational EBITDA by 50% to 80% versus last year.”

The figures did reveal that Kodak has invested heavily in a new generation of printer systems which will be unveiled in 2016.


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