Kodak posts wider-than-expected quarterly loss
NEW YORK (Reuters) - Eastman Kodak Co EK.N posted a bigger-than-expected quarterly loss on Thursday as higher silver and aluminum costs and increased spending on its inkjet printer business weighed on margins.
Shares fell more than 5 percent.
Kodak, the top maker of photographic film, has completed the major elements of an expensive transformation into a smaller company that focuses on digital photography products and services.
It reported a first-quarter loss of $114 million, or 40 cents a share, compared with a loss of $175 million, or 61 cents a share, a year earlier.
Excluding special items, the company's lost 39 cents a share, far more than the loss of 6 cents a share expected by Wall Street analysts, according to Reuters Estimates. Estimates of four analysts ranged from a loss of 18 cents to a profit of 7 cents, according to Reuters Estimates.
Kodak said revenue rose 1 percent to $2.09 billion, while gross profit margin slipped to 20.3 percent from 20.6 percent in the year-ago period, on significant increases in silver, aluminum and other raw materials costs.
Analyst Shannon Cross called the margins "the lowest level seen historically" and noted that commodity prices played a large part, particularly at Kodak's commercial printing unit, which reported an operating loss of $1 million even as sales rose 4 percent.
"Their commercial print business ... has never had a loss -- that was supposed to be one of the crown jewels," she said. "Its commodities (that hurt it) and investment in their new inkjet business, and they weren't able to offset it."
The raw materials are used in the making of such Kodak products as traditional film and plates for commercial printers.
Spot silver prices were significantly higher in the first quarter -- reaching a 27-year high in March -- driven by strong investment demand and the strength of gold and other hard assets. Prices have cooled in recent weeks but remain higher than one year ago.
Similarly, demand for aluminum is robust globally with brisk business from a number of industrial sectors. Aluminum inventories are expected to remain at low levels.
Kodak reaffirmed its forecast for 2008 of total revenue growth in the range of flat to 2 percent. The company reported revenue of $10.301 billion in 2007
Kodak shares fell $1.04 percent to $16.85 on the New York Stock Exchange.
(Reporting by Franklin Paul; Editing by Steve Orlofsky)