Kodak Swings to Profit as Revenue Growth Accelerates
Gross margin widened seven percentage points to 26% in the second quarter.
Eastman Kodak (KODK), the printing and advanced-materials company, swung to a quarterly profit as stronger pricing and higher volume lifted sales and operating earnings.
The results extended a steady acceleration in revenue growth, from a 1% decline a year earlier to gains of 3% in the third quarter, 7% in the first quarter and 18% in the latest period.
Revenue rose to $311 million from $263 million and increased 17% sequentially. Net income was $17 million, compared with a $26 million loss a year earlier and a $16 million loss in the first quarter.
Gross profit increased 61% to $82 million, outpacing the sales gain, while operational EBITDA quadrupled to $36 million. EBITDA had declined in each of the previous three quarters before reaching its highest level in the five-quarter comparison.
The Advanced Materials & Chemicals business led the improvement. Segment revenue rose 40% to $105 million, accelerating from 3% growth in the first quarter, while operational EBITDA increased to $22 million from $8 million a year earlier. Print revenue climbed 10% to $195 million, and the segment produced $8 million of operational EBITDA after a $4 million loss a year earlier.
Product sales drove the top-line increase, rising 22% to $276 million, while services revenue declined 5% to $35 million. Lower interest and restructuring expenses also supported the profit swing, partly offset by higher selling, general and administrative costs and stock-based compensation.
Kodak used cash to reduce leverage, cutting long-term debt by $100 million from year-end to $108 million. Cash declined to $290 million as term-loan repayments and inventory investment outweighed pension-plan investment redemptions, leaving the balance sheet leaner while working-capital demands persisted.