By Ben Dobbin
The Associated Press

ROCHESTER, N.Y. - Eastman Kodak Co., which turned picture-taking into a hobby for the masses a century ago, is cutting 12,000 to 15,000 more jobs - close to a quarter of its work force - as it struggles to make the wrenching transition from film to digital photography.

The chemical-photography franchise that turned Kodak into an American icon and one of the world's most recognizable brand names has been on the wane for more than a decade, but its decline accelerated in the 21st century as filmless digital cameras became hot sellers.

The world's biggest photography company is now betting its future on new-wave photography, digital printing and health imaging, which are fast-growing but highly competitive markets. Without a swift, well-honed conversion, analysts warn, Kodak risks fading into history.

"We've got good momentum, particularly in our digital portfolio," which turned a profit for the first time last year, chief executive Dan Carp said Thursday at an investors' conference in New York.

"Kodak has a three-year plan to ensure we stay ahead," he said. "We believe 2003 marks the bottom, and we'll build on our performance going forward."

The latest job cuts in the signature film business, spread over three years, will slash Kodak's global payroll to World War II-era levels.

They came as Kodak posted a fourth-quarter profit of $19 million, or 7 cents a share, down sharply from $113 million, or 39 cents, a year ago.

Excluding restructuring and other one-time items, however, earnings were $199 million, or 70 cents a share.

That beat the consensus forecast of 52 cents a share among analysts surveyed by Thomson First Call. Sales rose 10 percent to $3.78 billion from $3.44 billion.

Analysts appeared to welcome Kodak's ever-sharper focus on digital technology. In trading on the New York Stock Exchange, Kodak shares climbed $3.49 to $30.95.

"With strong declines in film volume ... this wasn't really a huge surprise," said analyst Shannon Cross of Cross Research-Soleil Securities in Short Hills, N.J.

"It's needed, but it radically increases the risk profile of the company. You've got a company that's going from oligopoly to a very competitive landscape."

Kodak also said Thursday it has launched a $35 million tender offer to buy the remaining 41 percent stake in Japanese digital camera supplier Chinon Industries that it doesn't already own.

The company plans to trim about 2,500 to 3,500 jobs this year. It eliminated up to 6,000 jobs in 2003, shrinking its payroll to 64,000 from a peak of 136,500 in 1983. It employs 35,500 people in the United States, including 20,600 at its fading manufacturing hub in Rochester.

It will take charges of $1.3 billion to $1.7 billion through 2006, including up to $900 million in severance costs.

Last week, Kodak said it will stop selling reloadable film cameras in North America and Western Europe this year. In 2003, filmless digital cameras, which record snapshots on computer chips, began outselling traditional film cameras for the first time in the United States.