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Kodak sees possible return to sales growth in 2010

NEW YORK (Reuters) - Eastman Kodak Co EK.N sees a possible return to sales growth in 2010, as its digital printing and licensing businesses improve and declines in its shrinking film business moderate, the company said on Thursday.

Kodak, which has been shifting its focus to digital products and services as demand for traditional cameras and film slip, said it expects digital revenue growth of 5 percent to 9 percent for the year, with overall revenue flat to up 1 percent.

That would be a vast improvement from 2009, when the company’s revenue fell 19 percent to $7.6 billion. Kodak’s 2010 outlook of $7.5 billion to $7.7 billion compares with analysts’ view of $7.65 billion, according to Thomson Reuters I/B/E/S.

Despite the company’s optimism, Kodak shares dropped 10 percent on Thursday, apparently buckling after soaring 61 percent over the past month.

The company’s plans are also long-term in nature, and may not produce a profit in 2010. Kodak said it expects to post results this year that range from a loss from continuing operations of $50 million to a profit of $50 million.

Ink revenues should more than double in the year, providing a significant boost to digital sales, and the company is expanding into the market for small offices and will offer personalized printing services, such as catalogs.

Other new initiatives include providing souvenir imaging services at theme parks and using its expertise with specialty chemicals to make dyes and inks for the fragrance market.

It added that it sees stable performance and a continued solid cash contribution from its movie industry segment and moderation in the industry decline rate across its traditional film product lines.

Kodak said it sees revenue for its traditional segment, which includes film, paper and movies, falling 14 percent to 18 percent in 2010 after falling 24 percent in 2009.

The outlook was delivered at Kodak’s annual investor meeting on Thursday, one week after it posted better-than-expected fourth-quarter results.

The report proved the strength of its patent licensing and sales of consumer inkjet printers, but showed that traditional film and printer paper revenue -- still a large part of the total -- continues to slip.

In October, the company said it sees licensing revenue averaging at least $250 million to $350 million each year for the next several years. Kodak will reap another $450 million this year from Samsung alone, under their licensing agreement.

Kodak -- which completed in 2008 an expensive four-year restructuring that transformed it into a maker of digital photography products and printers and halved its workforce -- said it sees total revenue in 2012 of $8.0 billion to $8.5 billion, with digital systems delivering up to $7.0 billion.

Kodak shares fell 69 cents to $6.14 in late morning trading on the New York Stock Exchange.

Reporting by Franklin Paul, editing by Maureen Bavdek and Gerald E. McCormick

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