April 30 (Bloomberg) -- Eastman Kodak Co. sank the most in almost two months in New York trading after posting a wider first-quarter loss than analysts estimated. The company also suspended its dividend and announced executive pay cuts.

The loss from continuing operations, adjusted for restructuring charges and other items, was $255 million, or 95 cents a share, the company said today in a statement. Three analysts surveyed by Bloomberg estimated a loss on that basis of 44 cents, on average.

Kodak is going through its second restructuring since 2003 as it pushes into digital technology and products amid a disappearing market for traditional film. The company said in January it would cut as many as 4,500 jobs, or 18 percent of its workforce, to save as much as $350 million annually.

“It was a pretty weak quarter across the board,” Chris Whitmore, an analyst with Deutsche Bank Securities Inc., said today in a telephone interview. “The recession is hitting Kodak pretty hard.”

Kodak fell 59 cents, or 16 percent, to $3.05 at 4 p.m. in New York Stock Exchange composite trading, the steepest drop since March 5. Shares of the Rochester, New York-based company have dropped 54 percent this year.

‘Overdue’ Dividend Move

The company will stop paying its 25-cent semi-annual dividend, which had a yield of 7.1 percent as of Jan. 28, the day before Kodak announced its latest restructuring plan. That was more than double the 3.2 percent yield of the Standard & Poor’s 500 Index at the time.

Kodak “was overdue for a dividend cut,” said San Francisco-based Whitmore, who recommends selling Kodak shares and doesn’t own them.

Other cash-saving measures include pay cuts. Chief Executive Officer Antonio Perez will reduce his salary through the end of this year by 15 percent, Kodak said. Directors and senior managers will have theirs decreased by 10 percent for the rest of the year. All other U.S.-based Kodak employees will take a week of unpaid leave.

‘Tough Quarter’

“The second quarter will be a tough quarter,” Perez told analysts and investors on a conference call. “If I see signs of any recovery, that will be more toward the third quarter.”

Suspending the dividend will save $134 million a year, Shannon Cross, an analyst with Cross Research Group LLC, wrote in a research note today.

“We remain concerned over Kodak’s use of cash in 2009 and 2010,” said Cross, who is based in Livingston, New Jersey, and recommends selling the shares.

Kodak ended the quarter with $1.309 billion in cash and $1.306 billion in debt. The net loss from continuing operations was $360 million, or $1.34 a share, compared with $114 million, or 40 cents, in the year-earlier period. Including discontinued operations, the loss was $353 million, or $1.32 a share.

Sales fell for the third straight quarter, declining 29 percent to $1.48 billion. Revenue in the consumer digital- imaging segment fell 33 percent to $369 million, partially offset by sales of inkjet printers and ink that more than doubled, the company said. Revenue from the graphic communications group dropped 26 percent, while sales in film, photofinishing and entertainment sank 31 percent.

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net.

Last Updated: April 30, 2009 16:58 EDT