Digital spells red ink for Kodak

Kodak is taking time to establish itself in the digital age

Struggling US camera company Eastman Kodak has returned its eighth quarterly loss in a row as it battles to fully adapt to the digital age.

However its shares climbed 4% as July-to-September losses narrowed to $37m (£18.4m) against $282m in the previous three months.

Kodak now expects a $400m-$600m loss from its continuing business in 2006, including restructuring costs.

These include the axing of 27,000 jobs - largely in film manufacturing.

Not enough?

Despite the cutbacks - which will see Kodak employ 50,000 people globally, against a peak of 145,800 staff in 1998 - some analysts say not enough is being done.

There will be more restructuring to come Shannon Cross, Analyst See Kodak's share price

"They are still going to have 10,000 people in their analogue business so there will be more restructuring to come," said Shannon Cross of Cross Research.

Once a byword in photography, Kodak is struggling against the collapse in sales of traditional photographic film, which used to be its main business.

Though it is becoming a major player in digital cameras and printing devices, the firm has shown little signs of returning to profit.

Total sales fell to $3.2bn from $3.55bn a year before - with revenue from digital products falling 1.2% and traditional film sales dropping 19%.

In the same quarter a year ago, the Rochester, New York-based firm made a loss of $914m - though $778 of this was a one-off tax-related charge.

Earlier this year Kodak said it was to contract out all of its digital camera manufacturing to Singapore-based Flextronics.

Instead it would now focus on the design and sales of its digital cameras.