Kodak earnings lost on digital transition

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The shift from traditional to digital photography along with high restructuring costs have handed Eastman Kodak a loss in sales that led to a report of first-quarter losses.

The company reported a net loss of $142 million in the first quarter compared to earnings of $21 million in the same quarter last year.

Absent exceptional costs of $152 million, Kodak had $9 million in earnings for the quarter, still below expectations. Kodak shares fell 8 percent in early trading on Friday as a result of the unfavorable report.

Kodak has been laying off employees and closing factories as sales of film dropped 29 percent worldwide and 17 percent in the United States.

The company expects to lose 15,000 employees by 2006 and to close about a third of its factories as it shifts operations from traditional photography to digital products, health imaging, and high-volume printing. Sales of Kodak’s digital products were up by 23 percent.

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