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Eastman Kodak Q1 Earnings Dip Y/Y Amid Cost Pressures & Flat Sales
Eastman KodakEastman Kodak(US:KODK) ZACKSยท2025-05-14 16:50

Core Viewpoint - Eastman Kodak Company experienced a decline in stock performance and profitability in Q1 2025, despite stable revenues, highlighting ongoing financial challenges and the need for strategic restructuring [1][12]. Earnings & Revenue Performances - Kodak reported consolidated revenues of $247 million, a decrease of 1% from $249 million in Q1 2024, with gross profit declining 6% to $46 million due to increased aluminum and manufacturing costs [2]. - The company recorded a net loss of $7 million, a significant drop from a net income of $32 million in the same quarter last year, influenced by the absence of a $17 million gain on asset sales [3]. Other Key Business Metrics - The Print division's revenues fell to $165 million, down $17 million year-over-year, with operational EBITDA dropping to negative $9 million due to input cost pressures [4]. - The Advanced Materials and Chemicals (AM&C) segment saw a 25% revenue increase to $74 million, with operational EBITDA rising to $7 million from $1 million, driven by stronger demand and improved pricing [5]. Cash Flow and Financial Position - Kodak ended the quarter with $158 million in cash, a decrease of $43 million from the end of 2024, and reported negative cash flow from operations of $38 million compared to a $17 million inflow in the previous year [6]. Management Commentary - CEO Jim Continenza emphasized Kodak's commitment to U.S.-based manufacturing and the focus on shedding unprofitable businesses while investing in innovation and operational efficiencies [7]. - CFO David Bullwinkle highlighted the AM&C segment as a growth driver and noted that cash usage was primarily for investments in AM&C initiatives and higher input costs [8]. Factors Influencing Headline Numbers - The stability in top-line revenues was attributed to steady demand in core businesses and contributions from AM&C, while the decline in net income and operational EBITDA was due to increased costs and the absence of prior-year asset sale gains [9]. Guidance Provided by Management - Management indicated ongoing investments in innovation and operational efficiency, particularly in AM&C and digital printing technologies, with expectations for the cGMP pharma facility to support revenue expansion later in 2025 [10]. Other Developments - Kodak made progress in terminating its U.S. pension plan, with plans for asset reversions to aid in debt reduction, and amended its term-loan credit agreement to allow interest payments in-kind for the next six quarters [11].