Digital sales overtook traditional sales for the first quarter of 2006 with an increase of 29% to 870m ($1.6bn). Traditional sales declined by 20% to 670m. Total sales were 1.55bn.

Eastman Kodak chairman and chief executive officer Antonio Perez said the acceleration of digital earnings during March had increased the firm's confidence for a "solid full-year performance".

"We now expect to achieve profitability in our entire digital portfolio during the third quarter, a full quarter sooner than last year," Perez said.

Eastman Kodak also announced it would restructure its manufacturing operations so that each business unit was assigned its own facilities.

"Our goal has been to dedicate to our business units the resources they need to build on their success and operate in an autonomous manner," said Perez. "Kodak is now a digital company, and these actions are required to support our digital business model."

The firm's restructure, to support its metamorphosis from a film to a digital business, was first announced in 2004 and included 15,000 job cuts, a fifth of the firm's worldwide workforce, to cost 922m in restructuring charges.

Eastman Kodak expects to complete most of the restructure by 1 July.