Kodak 2Q Profit Falls 14 Percent On Rising Material Costs

Rochester, NY (AHN) - Imaging giant Kodak said its second-quarter profits fell 14 percent as a tax refund and higher digital sales were unable to balance greater investments in inkjet printers and slumping film sales. The company earned $495 million, down from $581 million for the same period in 2007.

Kodak said sales rose slightly to $2.49 billion, up from $2.47 billion in 2007. The company received a $581 million tax refund during the second quarter. CEO Antonion Perez told reporters the company expects operational earnings between $400 million to $500 million for 2008.

The company also said profits from film were more than cut in half due to increased costs for oil, silver and other chemicals used in the business. Sales of consumer-based film dropped by 14 percent to $847 million, but film for the entertainment industry gained somewhat. Kodak recently spent $125 million to raise inkjet printer sales, including introducing a new consumer-oriented inkjet.

However, while traditional film was in decline, revenue from digital cameras, inkjet printers and electronic frames jumped 17 percent to $756 million.