The relentless onslaught of the digital revolution has taken its toll on purveyors of traditional film cameras. And investors in camera and film maker Eastman Kodak (NYSE:EK) apparently will grasp at any straw to break the five-year slide of its stock price from around $50 a share to just about $20. Last month, the stock hit a two-year low when the company reported its fourth straight quarterly loss.

Kodak is in the midst of a dubious restructuring during a time in which revenues from digital products surpassed those of traditional products for the first time in its history. Yet despite the growth that the company has been experiencing from digital products, its financials are still reeling from a $900 million non-cash charge, layoffs that will shrink its workforce to less than 50,000 employees (about a third of its 1988 peak of 145,000), factory closings, and an additional $9 million loss reported earlier this month that will extend its third-quarter loss from $3.58 to $3.61 a share.

So investors were heartened when the IRS settled a tax dispute with Kodak that will return $15 million to $25 million to the company's coffers next month or early next year. Last Wednesday, they bid up the company's shares by as much as 15% before the stock closed at more than $24 a share, an 8% boost over the previous session. The stock rose a few pennies more during Friday's light trading. Yet the exuberance is probably misplaced, since the one-time influx of revenues will do little to shore up the bottom line. Sure, it's nice to not have the tax dilemma hanging over the company anymore, but how many tax refunds can investors expect?

With all of the spending Kodak has been doing to jump-start its digital imaging side, and with the debt it's been adding to the balance sheet in the process, perhaps it ought to consider purchasing the rights to the "living photographs" that students in California and Texas created using the e. coli bacteria, best known for causing food poisoning. Like a moving photograph from Time Warner's (NYSE:TWX) Harry Potter movies, the students created a photographic image with a resolution of about 100 megapixels, or about 10 times greater than high-resolution printers achieve. Maybe Hewlett-Packard (NYSE:HPQ) or Lexmark (NYSE:LXK) will want to take a look.

Two years ago, the company essentially gave up the ghost on its film-based business, in an acknowledgment that it was in an inexorable decline. Its competition suddenly was no longer Fuji (NASDAQ:FUJIY), the maker of green film boxes and owner of an emerald-colored blimp, but rather high-tech firms such as Hewlett-Packard, Canon (NYSE:CAJ), and Sony (NYSE:SNE). Kodak estimates that by 2008, some 80% of its revenues will come from digital products and sales will grow to more than $17 billion.

Kodak's turnaround is nowhere near complete. If it hopes to achieve its lofty goals and not cause a case of investor food poisoning, it can't rely upon one-time tax credits and debt-inducing acquisitions.

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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article.