Kodak Projects Dramatic Growth Driven by Digital

Late last month, Eastman Kodak Company, based in Rochester, N.Y., reported significant progress in the digitally oriented growth strategy it presented last year and it projected dramatic gains. Officials expect sales of digital products and services to increase at a compound annual growth rate of 36% between 2003 and 2007. Previously, they projected a growth rate of 26% each year during that period.

Digital products and services include major portions of the company's three main groups: Health Imaging, Digital & Film Imaging Systems, and Graphic Communications, which includes Encad, Kodak Versamark, and NexPress Solutions.

Kodak also maintains a 50% stake with partner Sun Chemical Corporation in Kodak Polychrome Graphics.

From 2003 to 2007, the company projects that total revenue will grow at an annual rate of 7% to 8%. Adds Kodak, its projection envisions a rapid decline in its traditional film business but a higher rate of growth in digital products and services; as a result, the company maintains its target for total sales of $16 billion and operating earnings of $3 billion by 2006.

Daniel A. Carp, chairman and chief executive, says, "Our digital portfolio is gaining wider acceptance in commercial and consumer markets, as evidenced by the higher share Kodak now enjoys in computed radiography and consumer digital cameras, to name but two examples. Our digital sales are increasing so steadily that we expect by next year that more than half of our total sales will be digital, and that profits will be higher than in 2004."

Carp says these achievements demonstrate that Kodak is making the most of its digital opportunities. He notes, "Our sales are rising, our costs are declining, our profits are growing, and our balance sheet is getting stronger. We are delivering on the strategy to accelerate profitable, digital growth, and we are confident of success in the months and years ahead."