UPDATE 3-Kodak posts loss, but sees near-term improvement

* Q3 loss per share $0.23, vs est. loss $0.19

* Rev fell 26 pct to $1.78 bln vs estimates $1.89 bln

* Says some sales stabilizing, but forecasts weak FY revs

* Shares rise less than 1 percent (Adds outlook details, analyst and CEO comment, byline)

By Franklin Paul

NEW YORK, Oct 29 (Reuters) - Eastman Kodak Co (EK.N) fell to a third-quarter loss on soft demand for products from digital cameras to corporate printing systems, but said there are signs of improvement heading into the holiday shopping season.

That silver lining will not be enough to halt declining sales at Kodak, which last month received a cash infusion from Kohlberg Kravis & Roberts (KKR) [ID:nN16155121]. Kodak on Thursday said it expects 2009 revenue decline to be closer to 18 percent, but still in a range of 12 percent to 18 percent.

"Despite the recent cash infusion from KKR, we remain concerned with Kodak's cash flow dependence on non-recurring (patent) licensing, required investments in unprofitable inkjet platforms and exposure to the secular decline in analog film," said analyst Shannon Cross of Cross Research.

Kodak, hit hard by the economic downturn as consumers eschew photo-taking vacations and businesses delay purchasing printing systems, said third-quarter net loss was $111 million, or 41 cents a share, compared with a year-earlier profit of $101 million, or 35 cents a share.

Excluding special items such as restructuring costs, the loss was 23 cents a share, missing analysts' expectations of a loss of 19 cents a share, according to Thomson Reuters I/B/E/S.

Revenue declined 26 percent to $1.78 billion, also falling short analysts' view of $1.89 billion. The Rochester, New York-based company, said revenue in its commercial printing group fell 18 percent to $674 million.

That is not a new problem for Kodak, whose revenue has missed Wall Street expectations for five consecutive quarters as consumers spend less on discretionary items like pocket video cameras. Its growth plans have been hampered by tight credit markets that have kept other companies from investing in its commercial printing systems and services.

However, Kodak said it saw some improvement in its consumer inkjet printer business in the third quarter, and expects "significant improvement" in the fourth quarter in areas such as commercial scanners and Entertainment Imaging.

Chief Executive Officer Antonio Perez said he was optimistic that strong licensing revenue would help propel results in the crucial holiday period, when consumers buy cameras, printers and digital frames as gifts.

Spurred by the potential rebound, Standard & Poor's Equity Research analyst Erik Kolb lifted his rating on Kodak's shares to "buy" from "hold," and trimmed his forecast for Kodak's 2010 loss to 40 cents a share from 60 cents a share.

"Though we see further struggles, we are encouraged by Kodak's comments that sales trends are rebounding from their worst levels," he said in a client note.