Kodak profits from patent technology

Eastman Kodak’s strategy to build its business around technology patents has helped the company post a higher-than-expected fourth quarter profit of US$443 million, compared with a previous-year loss of US$918 million.

The company announced that revenue rose 6% to US$2.58 billion in the quarter.

Analysts said the iconic camera maker also began benefiting from “difficult restructuring moves of recent years” and from its ongoing shift to digital products from traditional film-based businesses.

"Our strategy is working," Kodak Eastman chairman and chief executive Antonio Perez said during a press briefing.

"While the general economy has not fully recovered, the level of business activity increased in the fourth quarter, and the momentum that began in the economy and for Kodak in the third quarter continued in the fourth quarter."

During the quarter, Kodak settled trade disputes with Samsung and LG Electronics Inc. and negotiated new royalty-paying deals tied to its digital-camera technology. Kodak also sold its OLED business to an LG unit.

It said the asset sale generated US$100 million while the licensing deal with LG generated US$414 million in revenue for its consumer digital-imaging group.

A similar technology licensing agreement with Samsung generated a US$100 million payment in December and is expected to generate additional pre-tax payments of $450 million in 2010, Kodak said.

Earlier this month, Kodak filed similar claims regarding its digital-imaging technology against Apple Inc. (AAPL) and Research in Motion Ltd. (RIMM).

The Wall Street Journal reported that Kodak executives haven't changed their multi-year target of generating US250 million to US$350 million annually from intellectual-property licensing, upcoming licensing revenues could be "colossal," said one analyst.

Ulysses Yannas, an analyst with the brokerage firm Buckman, Buckman & Reid said he expects Kodak could eventually generate at least as much in payments from each of the companies as it has negotiated from LG and Samsung, based on the patents involved and the volume of products sold by Apple and RIM.

Revenue from digital businesses rose 12%, while revenue from traditional businesses fell 10%.

Blaze at old Kodak building

Meantime, firefighters battled for about two hours last Saturday to bring a blaze at Coburg's historic former Kodak building under control. The fire started on the upper floor of the five-storey building in Elizabeth Street about 5pm.

The old Kodak building, due to be demolished soon, has been unoccupied for several years and there was nothing of value left inside, police said.