Eastman Kodak Co. said Thursday it lost $246 million in the first quarter _ its third quarterly loss in the last year _ on weaker sales of digital cameras and film.
The results missed Wall Street expectations and its stock fell almost 10 percent to a 20-month low in afternoon trading.
Vigorous sales of inkjet printers, however, offered glimmers of hope that the picture-taking pioneer remains on course to recast itself into a profitable player in digital photography and printing.
"Overall, if you look at Kodak's reported numbers, it looks horrible," said Ulysses Yannas, a broker for Buckman, Buckman & Reid in New York. "If you start analyzing it, it looks better, especially on the increased sales in consumer inkjet."
But others see only a perilous road ahead.
"It's at the point where you start to look at (whether) you could sell various parts of the business, or break it up," said analyst Shannon Cross of Cross Research in Livingston, N.J.
Kodak said its loss in the January-to-March quarter amounted to 91 cents a share. That compares with net income of $119 million, or 40 cents per share, a year earlier when results were swelled by $550 million in one-time revenue from a digital-imaging patent-litigation triumph.
Excluding items, Kodak said it lost $1.13 per share in the latest quarter.
Revenue dropped 31 percent to $1.32 billion from $1.9 billion a year ago.
Analysts surveyed by FactSet expected an adjusted loss of 48 cents a share on revenue of $1.41 billion.
Its shares fell 31 cents, or 9.8 percent, to $2.86 in afternoon trading. They last traded that low in July 2009.
Revenue from the company's digital business plunged 36 percent to $955 million. But excluding the year-ago licensing payment from South Korea's Samsung Electronics Co., Kodak said digital revenue rose 2 percent and overall sales fell by just 3 percent.
Film group sales dipped 14 percent to $367 million, hit by industry volume declines and surging costs for silver.
Sales of Kodak's low-end cameras have been hurt by lingering weakness in discretionary consumer spending and stiff competition from smart phones and video cameras. Part of the decline can be attributed to its attempt to shift to pricier cameras with higher profit margins.
Analysts also pointed to stiff competition from Hewlett-Packard Co. in retailer kiosks, and a slump in movie-film revenue mirroring a migration to digital-cinema alternatives.
The 130-year-old company has been struggling to make headway in its nearly decade-long digital transformation. Since 2004, it has reported only one full-year profit _ in 2007 _ and expects more red ink this year before crossing back to profitability sometime in 2012.
It is investing heavily in four growth businesses _ workflow software, packaging, home inkjet printers and high-speed inkjet presses _ that generated a 23 percent jump in sales in the quarter. Through 2013, Kodak expects those revenues will reach nearly $2 billion, accounting for 25 percent of all sales.
Kodak is banking on replacing the huge profits it once made from film with ink revenue, which climbed 85 percent in the quarter. More than 3 million people already own Kodak home inkjet printers, and Yannas estimates that 5.3 million units will be installed by year-end.
"What matters to us is to keep building this installed base and then get this ink revenue that keeps growing year over year," CEO Antonio Perez told analysts in a conference call. "The profitability comes from ink."
Kodak expects to turn its first profit from home inkjet printers late this year, and its commercial line of printers is targeted to turn profitable in 2012.
The company is relying mightily on leaner costs to help see it through its transition. It has trimmed its work force to 18,800 from 70,000 in 2002.
Graphic communications sales rose 4 percent to $625 million, lifted by stronger demand for digital printing plates and scanner sales in its document imaging unit. But investments in commercial inkjet printing widened its operating losses to $71 million from $40 million a year ago.
Its consumer digital imaging division turned from a year-ago profit of $401 million to a $168 million loss as sales slid to $330 million from $884 million.