UPDATE 3-Kodak growth concerns overshadow patent riches

* Q1 EPS $0.82 vs Wall St est. $0.90

* Rev rose 31 pct to $1.93 bln

* Licensing deals add $550 mln in revenue

* Shares fall 17 percent
(Adds results details, analyst comment, byline)

By Franklin Paul

NEW YORK, April 29 (BestGrowthStock) – Eastman Kodak Co (EK.N: )
posted a disappointing first-quarter profit (Read more your timing to make a profit.) on Thursday, and
concerns about sluggish growth in its printing and camera units
overshadowed lucrative patent deals, sending its shares down 17
percent.

For the second quarter in a row, the company’s bottom line
was propped up by a one-time pop in revenue from licensing its
patents to camera and phone makers. Unit sales of cameras and
commercial printing systems were tepid.

“We benefited from the successful completion of the
(patent) transaction,” Chief Financial Officer Frank Sklarsky
said on a conference call. “Other parts of the consumer
business were impacted somewhat by skepticism of consumers, who
continue to be cautious with their discretionary spending.”

Kodak’s revenue jumped to $1.933 billion from $1.477
billion one year earlier, thanks to $550 million from
intellectual property deals with South Korea’s LG Electronics
Inc (066570.KS: ) and Samsung Electronics Co Ltd (005930.KS: ).

Analyst Shannon Cross of Cross Research said the company’s
revenue excluding the patent agreements and favorable current
exchange was down 9 percent.

“We remain concerned with Kodak’s dependence on
nonrecurring IP licensing for cash flow, required investments
in unprofitable inkjet platforms and exposure to the secular
decline in analog film,” Cross said.

First-quarter profit (Read more your timing to make a profit.) was $129 million, or 40 cents a share,
compared with a year-earlier loss of $360 million, or $1.34 a
share.

Excluding special items, Thomson Reuters I/B/E/S calculated
the profit to be 82 cents a share, compared with an analyst
consensus estimate of 90 cents a share.

Kodak last earned an annual profit in 2004. Investors
continue to seek signs that its lengthy, expensive
restructuring — which shifted its focus to digital photography
services and printers and away from photographic film — is
headed for profitability.

Shares of Kodak fell 17 percent to $6.93 in afternoon
trading on the New York Stock Exchange.

Company executives remain consistently upbeat about the
company’s outlook despite sluggish first quarter returns in two
of its three units. Sales in Kodak Graphic Communications
segment rose 1 percent, while Film, Photofinishing and
Entertainment Group sales fell 14 percent.

Kodak attributed its optimism to improved profitability in
its consumer inkjet printer business, where revenue rose 27
percent on higher hardware and ink sales.

“Overall, we are pleased with our first-quarter performance
as it shows we’re on track to achieve our goals for the year,”
said Chief Operating Officer Phil Faraci on a conference call.
“The first quarter is another solid step toward sustainable
profit growth.”

Standard and Poor’s equity analyst Eric Kolb, who on
Thursday cut his rating on Kodak to “sell” from “hold,” said
the rapid decline in sales of film hurt Kodak’s ability to
invest in growth areas.

“Additionally, we expect the consumer inkjet segment to
remain unprofitable in the near-term despite rising sales,” he
said in a note to clients.

The company widened its outlook for a full-year loss from
continuing operations to a range of $50 million to $150
million, including the impact of a $102 million net charge for
early extinguishment of debt.

Excluding the charge, the company expects a loss of $50
million to a profit of $50 million.

It left its 2010 revenue forecast unchanged at a range of
$7.5 billion to $7.7 billion.

Stock Market Money

(Reporting by Franklin Paul; Editing by Derek Caney and Gerald
E. McCormick)

UPDATE 3-Kodak growth concerns overshadow patent riches