The report showed graphic communications group sales were
$812 million, a 4% increase from the year-ago quarter and 40% of the total
sales figures. However loss from operations was $1 million, compared with
earnings of $9 million in the year-ago quarter.

Kodak says, "The earnings decline was primarily driven by
higher aluminum costs and planned R&D investment in the commercial inkjet
printing business in advance of the industry's major trade show, drupa."

At the show, the company will introduce Kodak stream technology,
which the company says is a revolutionary approach to continuous inkjet
printing that provides offset-class quality, speed and cost.

The
report also showed that over-all sales had reached $2.093bn, an increase of 1%
from $2.080bn in last year's first quarter. The company's first-quarter loss
from continuing operations, before interest, other income, net, and income
taxes was $81 million, compared with a loss of $186 million in the year-ago
quarter.

Antonio Perez, Kodak chief says, "Our first-quarter results are very much in
line with our expectations, which included forecasted seasonality, and provides
an early indication that Kodak is on a growth track.

"We delivered strong performance across our major digital businesses,
reinforcing our confidence in achieving our revenue, earnings and cash goals
for the year."

Film, photofinishing and entertainment group first-quarter
sales were $724 million, down from $830 million in the year-ago quarter,
representing a decrease of 13%. Earnings from operations were $26 million,
compared with $30 million in the year-ago quarter.

The results reflect impacts from increased silver and other
raw material costs and a decreased demand of photographic film and paper,
according to the company.

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