The company's loss from continuing operations for 2007 was £103m ($205m), a £302m improvement on 2006. The loss per share improved from £1.41 to 36p.

Fourth-quarter earnings at its Graphic Communications Group rose 7% year-on-year to £500m, "driven by increased sales of digital plates, Nexpress digital colour printing presses, and digital printing consumables".

In the fourth quarter, Kodak generated £1.62bn in sales, a 4% rise from 2006 levels. The star performer was the digital division, where fourth-quarter revenue totalled £1.14bn, a 15% increase year-on-year.

However, traditional revenue declined by 15% to £479m, sparking a 3.4% share price drop, down 35p to £9.90.

Digital earnings for the fourth quarter reached £73.54m, up from £71.02m in the same period in 2006.

Kodak has recently introduced several new product lines, including the Kodak all-in-one inkjet printing system, EMS business software, and the Nexpress S3000 digital production press.

Antonio M Perez, chairman and chief executive of Eastman Kodak, said he was particularly pleased with the company's entry into the £25bn consumer inkjet market, exceeding the first-year sales goal, despite the brand's 30% price premium over the industry average.

"Clearly, our value proposition is resonating with consumers and they are willing to pay a bit more for a Kodak printer because they know they will save money every time they print," Perez said.