The performance includes strong demand for the market leading offerings from the company’s consumer digital portfolio and the successful completion of the company’s acquisition programme to support its Graphic Communications business.
For all of 2005, digital sales represented 54 per cent of total revenue, marking the first time in the company’s history that digital revenue exceeded traditional.
Digital earnings were $161m, and were favourably impacted by a number of items, including a year-over-year increase in royalty income, which reflects the company’s continuing progress in the monetisation of its intellectual property, as well as the favourable impact resulting from the company’s Graphic Communications Group acquisition programme.
On the basis of generally accepted accounting principles in the US (GAAP), the company reported a fourth quarter loss of $52m, or $0.18 per share. This largely stems from $283m in after tax restructuring charges, partially offset by the previously announced tax audit settlement between the company and the Internal Revenue Service that resulted in the reversal of certain tax accruals totalling $243m.
Visiting Australia last week, Garron Helman, managing director of the greater Asia region and vice president of the Graphic Communications Group, said digital exceeding film, a segment dominated by Kodak, was a milestone for the company.
Helman told the press in a meeting in Sydney that the public could expect a lot of new innovation from Kodak as the company strived to make printing easier for its customers.
“In the US only three per cent of all digital photos taken are printed,” he said.
Helman reported solid growth in the Australian market in the past few years, and said the future was looking promising for
GCG, as the company was in the process of losing all its brand names, tying all its solutions together and consolidating the GCG brand.
“We will be able to bring a lot more value to the printing market. Kodak is relying on GCG and a very strong belief that the markets we service will continue to grow and be successful in the future.”
Eastman Kodak chairman and CEO Antonio M Perez lamented that Kodak is now a thriving digital company.
“The fourth quarter marked the first time that we managed the company as it will be run in 2006, and the digital earnings performance was exceptional. And for all of 2005, we made tremendous progress on our digital transformation,” says Perez.
“We completed an aggressive acquisition program that established Kodak as a powerhouse in the graphic communications market, we strengthened our market position in consumer digital with several innovative new product introductions, and we made substantial progress on our goal of reducing our traditional manufacturing footprint, while benefiting from the strong cash flows available from that business. We enjoy a solid cash position, and we are determined to expand profit margins in the sizable digital businesses that we have assembled.”
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