Eastman Kodak announced today that its digital sales have overtaken revenues from traditional film-based imaging for the first time.

The firm's fourth-quarter financial results reported that digital sales represented 54 per cent of total revenue for 2005.

Digital earnings reached $161m boosted by factors including a year-over-year increase in royalty income, as well as the favourable impact of the company's Graphic Communications Group acquisition programme.

"Kodak is now a thriving digital company," said Antonio M. Perez, chairman and chief executive at Eastman Kodak.

"The fourth quarter marked the first time that we ran the company as it will be run in 2006, and the digital earnings performance was exceptional. And for all of 2005, we made tremendous progress on our digital transformation."

Kodak's sales rose 12 per cent overall, led by a 45 per cent increase in the sale of digital products and services.

This included "strong demand" from the company's consumer digital portfolio, and the successful completion of its acquisition programme to support its Graphic Communications business.

However, on the basis of generally accepted accounting principles in the US, the company reported a fourth-quarter loss of $52m. This was largely attributed to $283m in after-tax restructuring charges.