Kodak's ( EK) second-quarter earnings rose 37% from a year ago, with operating profit wiping out analyst estimates. But the company also said it is stepping up the pace of job cuts and now expects to sell less film in 2004 than it previously estimated.

Rochester, N.Y.-based Kodak earned $154 million, or 54 cents a share, in the three months to June 30, compared with $112 million, or 39 cents a share, last year. Sales rose 6% to $3.47 billion. Excluding charges for restructuring and layoffs, the company earned 89 cents a share.

Analysts had been forecasting earnings of 59 cents a share. Looking ahead, the company expects to earn $2.39 to $2.69 a share before restructuring items for full-year 2004, up from previous guidance of $2.15 to $2.45 a share. Analysts had been forecasting $2.20 a share.

Kodak said digital revenue increased 48% in the second quarter over last year, more than offsetting an 8% decline in traditional revenue. Among segments, health imaging sales rose 11% to $672 million, while graphic communications sales doubled to $177 million. Commercial imaging sales fell 3% to $193 million, while digital film and imaging sales rose 2% to $2.4 billion.

Kodak expects worldwide consumer film volume will fall 10% to 12% industrywide this year. It had previously estimated a 7% to 9% decline. In the U.S., the company now expects the decline to be in the range of 18% to 20%, compared with a previous forecast of a decline of 10% to 12%.

Kodak is in the process of cutting 12,000 to 15,000 jobs and said 2,700 positions were eliminated through the second quarter under a plan outlined in January. The company plans an additional reduction of 800 to 1,300 over the balance of the year. The cuts will result in charges this year of $315 million to $375 million.

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