Kodak has slashed its expectations for revenue growth and earnings in 2008, following the posting of weaker-than-expected quarterly results.

It is thought the bad quarter performance was caused by higher raw material costs and poor sales in its graphics business, and has overshadowed the high profits seen in Q3.

Previously the company had thought revenue could rise by up to 2%. It now sees it declining by 3-5%, and has also halved its 2008 forecast for earnings from operations.

"The economic environment is increasingly difficult," said Chief Executive Antonio Perez. "Given the importance of the fourth quarter to the company's full-year performance, and the unprecedented level of uncertainty surrounding the global economy, we must be prudent ... which requires us to adjust our financial outlook."

The third quarter had proved promising for Kodak, which reported a net income of $96 million, up from $37 million during the same period last year.

However, Q4 revenue fell 5% to 2.41 billion despite a 7% rise in its digital products segment which the company has chosen to focus on in recent years.

Shares have also dropped 30% since Kodak's last quarterly report, and 50% so far this year, showing an all-in-all not-so-rosy year for Kodak.