Soaring silver prices had added to a profit squeeze in its fast-shrinking film business. Research data suggests the rate of decline of film sales had accelerated to 36 percent from 26 percent in the first quarter, Deutsche Bank analyst Chris Whitmore said.
In addition, Kodak’s sales of low-end cameras have been hurt by stiff competition from smartphones and video cameras and by its recent shift to pricier models. Camera revenue through May had plunged 27 percent from the same period in last year’s second quarter, Whitmore said.
WHY IT MATTERS: Kodak is suing iPhone maker Apple Inc. and BlackBerry maker Research In Motion Ltd., saying their smartphone camera features infringe on image-preview technology it patented in 2001.
The case before the U.S. International Trade Commission, a trade-dispute forum that can block imports of patent-infringing products, has been extended until at least Aug. 30. Kodak is trying to negotiate a licensing deal it estimates could be worth up to $1 billion.
Mining its 1,100 digital-imaging inventions for repeated cash infusions has become an indispensable tactic driven in large part by Kodak’s painful digital turnaround. Since 2008, it has generated almost $2 billion in licensing fees and royalties.
Since 2004, Kodak has reported only one full year profit — in 2007 — and anticipates another annual loss this year before crossing back to profitability sometime in 2012. It has trimmed its work force to 18,800 from 70,000 in 2002.
WHAT’S EXPECTED: On average, analysts expect Kodak to lose 59 cents per share on revenue of $1.56 billion, according to FactSet.
LAST YEAR’S QUARTER: Kodak lost $168 million, or 63 cents per share, on a slump in film profit as revenue dipped 11 percent to $1.57 billion.
