Kodak reports profitable Q2

Eastman Kodak Co. reported its first operationally profitable quarter Tuesday since emerging from bankruptcy, recording $8 million in net income despite declining sales.

"The profit is modest," said George Conboy, an investor and chairman of Brighton Securities. "But to see Kodak's income statement printed in black ink is a welcome change."

The company's first officially profitable quarter post-bankruptcy came in 2014, but that was aided by a one-time $51 million windfall from intellectual property licensing. The current filing comes with an adjustment to last year's numbers, removing its Ohio-based Prosper inkjet business, a discontinued operation that Kodak expects to sell by year's end.

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“I’m pleased with Kodak’s return to profitability and the continued improvement of our quality of earnings,” Kodak CEO Jeff Clarke said, touting the "very strong first half" — actually stronger than expected given some variables and expenses. “While overall revenues declined, the company showed growth in our SONORA Plates, FLEXCEL NX Systems and motion picture film businesses.”

Kodak's revenues of $397 million were down 9 percent from this same time last year, attributed to price declines and drops in sales, including continued falloff with inkjet printer cartridges. The bump in net income — aided by lower operational expenses (including investment in research and development) — represented a 29 percent or $31 million year-over-year increase.

While not immune to global economic issues from the United Kingdom and European Union to Latin America, Clarke was confident that the company was positioned to meet its year-end goals and see continued growth. He touted the company's successes at drupa, a massive printing industry trade show held in Germany, and the promise that holds for the company going forward.

Kodak reported Eastman Business Park revenues of $3 million, down from $4 million in the second quarter of 2015, while expenses saw a similar drop landing at $1 million. But those numbers are misleading, Clarke said, attributing the dip to rounding and noting that year-to-date business shows revenues up from $6.6 million to $7.3 million; with profit going from $600,000 to an even $1 million.

Kodak stock closed at $16.80, up slightly on the day and significantly since its low point of roughly $8 a share in mid-January, returning the company's stock price to levels last seen in October.

"The long, slow decline in the stock has been reversed," Conboy said. "And while it isn’t up to where it was at the beginning of 2015 (when it topped $22), stock prices tend to be a leading indicator. Meaning, it's not uncommon for a stock to react in advance of what a company is actually doing, as investors get a sense of what is happening."

BDSHARP@Gannett.com