third-quarter earnings roughly quadrupled from a year ago, reflecting a big gain on the sale of the company's remote sensing unit in August. Excluding the gain, continuing-operations earnings fell by more than half, reflecting the cost of an ongoing layoff program.
The company also forecast a further deterioration in the market for camera film, a business it is exiting.
Kodak earned $479 million, or $1.67 a share, in the three months ended Sept. 30, compared with earnings of $122 million, or 42 cents a share, last year. Earnings from continuing operations were $45 million, or 16 cents a share, in the latest quarter compared with $115 million, or 40 cents a share, last year.
Adjusted to exclude charges, Kodak earned $226 million, or 79 cents a share, in the 2004 quarter compared with earnings of $246 million, or 86 cents a share, last year. Revenue rose 1% from last year to $3.364 billion. On that basis, analysts were forecasting earnings of 72 cents a share on revenue of $3.54 billion.
Kodak is phasing out its traditional film operations to focus on digital imaging. The company said "digital revenue" rose 39% in the third quarter over last year, while "traditional revenue" fell 13%. By segment, Kodak's digital and film imaging sales fell 7% from last year to $2.31 billion; health imaging sales rose 12% to $642 million; commercial imaging sales rose 3% to $195 million; and graphic communications sales rose 138% to $195 million.
Looking ahead, Kodak forecast full-year adjusted earnings of $2.44 to $2.64 a share, book-ending the analyst consensus of $2.52 a share. The company sees demand for consumer film declining by about 20% industrywide in 2005, with U.S. demand falling as much as 30%. The company repeated a target of $3 a share in operating earnings for 2006.
"Our third-quarter results demonstrate yet again the company's success in managing our digital transformation," the company said. "We continue to post strong revenue gains in our digital portfolio, and we are making the most of our traditional businesses by capitalizing on opportunities in emerging markets and reducing costs ahead of the decline in demand."