Kodak to Focus on Digital Products, Services

Eastman Kodak Co., the largest photograph company, will introduce digital imaging services and products such as lower-priced cameras and discontinue a Kodachrome film line to increase profit. Film sales have dropped as Kodak tries to make a profit on a $5-billion investment in digital imaging. Digital photography, which doesn’t use film, is expected by analysts to become the main method of photography as technology improves and costs drop. Kodak said last month that it couldn’t forecast earnings beyond this quarter because film sales were dropping faster than expected. Sales and earnings per share are expected to rise 5% to 7% a year once the slowdown in the U.S. economy ends, the Rochester, N.Y.-based company said. The forecast left some analysts skeptical about whether Kodak’s digital plan will increase profit. “We are having difficulty understanding how Kodak can implement an effective transition from a very slowly growing analog film business to a much more rapidly growing digital products and services business,” said Gary Schneider, an analyst at Bear, Stearns & Co., who has an “unattractive” rating on the shares. Kodak shares rose $1.80 to close at $45.70 on the NYSE. The stock has dropped 19% in the last year.