Eastman Kodak ( EK) swung to a third-quarter profit amid lower restructuring costs and higher revenue from its efforts to focus on digital photography.

The camera and picture-printing concern recorded third-quarter earnings from continuing operations of $34 million, or 12 cents a share, compared with a year-earlier loss of $83 million, or 29 cents a share.

The results included restructuring charges of $96 million, or 33 cents a share. The prior-year quarter included charges totaling $137 million, or 48 cents a share.

Analysts polled by Thomson Financial expected earnings of 27 cents a share. These forecasts typically exclude restructuring-related charges.

The Rochester, N.Y., company's sales slipped 1% to $2.58 billion, exceeding Wall Street's forecast of $2.49 billion.

Kodak is in the midst of a multiyear restructuring plan to shift its focus from its storied traditional film business to digital photography. The company's digital revenue climbed 12% in the quarter to $1.59 billion. Traditional film-related revenue dropped 16% to $986 million.

Digital earnings nearly tripled to $82 million. Traditional earnings fell 17% to $91 million.

Kodak's bottom line was helped by better gross profit margin, which rose to 26.4% from 25.1% in the prior year. The company attributed the improvement to lower costs related to manufacturing.

Looking ahead, Kodak lowered its estimated restructuring costs for the year to roughly $750 million to $850 million. Previously, the company projected total charges of $900 million to $1 billion this year.

The company also offered a somewhat rosier revenue outlook, projecting 2007 digital revenue growth at the high end of its previous forecast of 3% to 5%. Kodak expects its total revenue decline to be at the low end of its prior guidance of 4% to 7%.