The hottest Kodak digital business soared by 47

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Kodak: the digital business soared by 47% (Part 1)

on October 19, Eastman Kodak announced that the sales revenue in the third quarter of this year increased by 5%, of which the sales input of digital products and services increased by 47%, which became the main driving factor for the overall sales rise. The strong demand for Kodak's image and text products and civil digital products and services, which are market leaders, is the main reason for the company to achieve this performance

according to us accounting standards, the company lost US $1.029 billion in the third quarter, or US $3.58 per share. The loss mainly came from the non cash expenses arising from the provision for impairment of us deferred tax liabilities of US $900million (US $3.13 per share). The impairment provision is an accounting requirement arising from the company's continuous losses in the United States. The decline of the company's traditional business in the U.S. market requires the company to speed up the restructuring and expand the scope of restructuring, resulting in sustained losses in the United States

the third quarter of 2005:

* the sales volume was USD 3.553 billion, an increase of 5% over USD 3.374 billion in the third quarter of 2004. The goal of bigmax in the digital industry is to make innovative use of most of its existing data services that mainly test the fatigue properties of production materials. The revenue of bigmax is $1888 million, an increase of 47% over $1283 million in the third quarter of 2004. Revenue from traditional operations was $1661 million, down 20 per cent from $2085 million in the third quarter of 2004

* according to us accounting standards, the company has a net loss of US $1.029 billion, or a loss of US $3.58 per share. In the same period of 2004, the net profit of the company was 458million US dollars, or 1.6 US dollars per share

* the loss from continuing operations in the quarter was $103million, excluding income tax, interest, and other net income and expenses, compared with a profit of $3million in the same period last year

* the profit generated by the digital business was US $10million, compared with us $6million in the same period last year. This included a $18million positive impact from the reallocation of the costs of certain digital businesses to traditional businesses in the third quarter, and a $5million charge for reducing the useful lives of certain digital assets. In order to calculate a common basis comparable to the company's annual digital profit estimates, it is necessary to exclude $44million related to the operating results of Cleo and the acquisition accounting treatment of Kodak poly optical printing art, as well as $12million of outstanding R & D reserves. On the basis of the above calculation, the digital business profit in the third quarter was US $42million, of which September was significantly better than the first two months of the third quarter. This trend supports the company's previous view that the main part of Kodak's digital profit in 2005 will come from the last four months

"in the third quarter, our digital business revenue exceeded the traditional business revenue for the first time in the quarter, marking another milestone in our digital transformation." Antonio Perez, CEO and President of Eastman Kodak, said, "more importantly, the above data shows that our digital profit has increased by 3.5 times over the same period last year. The significant increase in September has further strengthened our confidence in achieving higher digital profit in the fourth quarter."

"we still maintain our commitment to the 2005 cash flow target at the investors' meeting on September 28 this year," said Peng Anton, "In this quarter, our cash flow performance was in line with expectations, with an increase in cash balance and a decrease in liabilities compared with the second quarter. We performed well in three measurement indicators of the company's management: the increase in digital business revenue, the increase in digital business profit, and the generation of cash flow." looking at all business departments, we can also see extensive evidence of the success of the company's digital transformation, "said Peng Anton, "Our graphic imaging Group continued to show strong growth momentum, and was a great success at the Chicago International Printing Exhibition in September. Due to the good sales performance of the computer radiography system, the operating profit margin of the medical group has recovered from the low level at the beginning of the year to the high level in this quarter. In terms of civil use, we began to sell the breakthrough easyshare-one zoom digital camera last month, making Kodak the first Companies that bring Wi Fi civilian digital cameras to market

this will throw away many useful signals:

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