Kodak medical sales grow, but earnings slip in Q3

Eastman Kodak Health Imaging reported third-quarter sales of $642 million, up 12% (up 9% excluding favorable exchange rates) compared with the third quarter of 2003. For the period (end-September 30), the Rochester, NY-based vendor had earnings from operations of $102 million, down from operating earnings of $117 million a year ago.

In quarterly highlights, net worldwide sales of digital products (including laser printers, digital media, digital capture equipment, services, dental practice-management software, and PACS) reached $410 million, up 24% compared with $330 million produced in the third quarter of 2003, reflecting volume increases and favorable exchange rates partially offset by a negative price/mix ratio. Kodak attributed the digital-product sales increase to its acquisition of PracticeWorks, its services strategic product group (SPG), and the digital media portion of the digital output SPG.

In the company's traditional product business (including analog film, equipment, chemistry, and services), Kodak generated third-quarter net worldwide sales of $231 million, down 4% compared with the $241 million produced in the third quarter of 2003. The decline was attributed primarily to lower volumes and price/mix for the film capture and output SPG, partially offset by favorable exchange rates, Kodak said.

Kodak had U.S. net sales of $276 million, up 10% compared with the $251 million turned in during the third quarter of 2003. Outside the U.S., Kodak had net sales of $366 million for the third quarter, up 14% compared with the $320 million for the prior-year quarter, or 9% excluding the favorable impact of exchange.

Kodak said the decrease in operating earnings reflects the impact of lower gross profit margins, increased SG&A, and increased investment for growth in R&D.

By AuntMinnie.com staff writers
October 20, 2004

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