Polaroid Corp.'s comeback kicked into high gear as the company yesterday reported strong fourth-quarter earnings and revenue, bolstered by a dramatic increase in sales of its new instant picture cameras.

The Cambridge instant-imaging company said it earned $28.5 million, or 64 cents a share, in the final three months of last year, compared with a loss from operations of $4 million, or 9 cents a share, in the corresponding period in 1998.

Sales rose nearly 20 percent, to $649.8 million from $541.8 million, in the final quarter of 1998.

The solid financial performance helped boost total 1999 revenue by 7 percent, to $1.98 billion from $1.85 billion. Profit for 1999 was $8.7 million, or 20 cents a share, vs. a 1998 loss of $51 million, or $1.15 a share.

"Their camera sales growth was very robust, so the question now is whether that momentum will continue into film sales - the area where they make most of their money - and if it does, they will have a hell of a year in 2000 and 2001," said B. Alex Henderson, an analyst at Prudential Securities.

The strong fourth quarter marked a milestone in the company's turnaround, said Gary T. DiCamillo, chairman and chief executive. He has guided the company since October 1995 and was rewarded on Tuesday with a contract extension through 2002. His employment agreement was set to expire in October.

Polaroid has struggled, with annual sales stagnant at about $2 billion for nearly a decade. For much of the 1990s, the company has been downsizing.

Lately, it has pinned its hopes on a new generation of cameras aimed at adolescents and young adults. The new products include the company's first single-use or disposable camera, called PopShots; a camera called I-Zone that fits in a shirt pocket and produces images the size of a postage stamp; and a low-cost camera, the JoyCam.

The success of the new cameras in the second and third fiscal quarters helped Polaroid emerge from its long doldrums. In the fourth quarter, the holiday sales rush plus a major TV ad campaign gave the company a new momentum.

Polaroid's fourth-quarter results did not surprise some Wall Street analysts, who had forecast 64 cents a share, according to First Call/Thomson Financial. They made their forecasts after Polaroid said in October that it planned to spend more money to promote the new cameras.

Polaroid shares, which have risen 9 percent in the past 12 months in anticipation of an expected sales upturn, closed yesterday at 22 9/ 16, up 2 3/16.

In 1999, the company sold a record 9.7 million instant cameras, surpassing a 1978 record.

Beyond its bread-and-butter instant photography business, Polaroid also sold more than 400,000 digital cameras, most of them through such mass merchants as Wal-Mart, which DiCamillo said made the company among the leaders in US digital camera sales volume in 1999.

Last year, Polaroid also sold some of its noncore assets, including its fiber-optics business and a group that sold anti glare filters for computers. It also completed a partnership agreement for its graphics imaging business.

"Full-year revenues for both instant film and cameras showed solid increases, validating our strategy to reinvigorate the business through new products, new channels, and new customers," DiCamillo said.

"These results give us confidence in the future," he added.

DiCamillo said he is targeting "high single or low double-digit" sales growth for the year and "significant double-digit operating profit increases."

Boston Globe Newspaper

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