The digital photography revolution has been pretty easy for all of us to see -- it's been clear that this new way of taking pictures has captured the popular imagination with everything from the point-and-shoot format to cell phones. That revolution has left what might have seemed to be an unlikely casualty -- one of the stalwarts in photography, Eastman Kodak (NYSE:EK). Yesterday, the venerated company, which has been around since photography was in its infancy, reported a rather ugly quarter, as sales of film dropped faster than expected, particularly in emerging markets like China.

Headlined "Kodak Accelerates Digital Transformation Strategy," Kodak's press announcement put the ugly news in the sub-headlines. Specifically, Kodak reported a second-quarter net loss of $146 million, or $0.51 per share. Sales increased 6% to $3.69 billion. Gross profit margin ticked down to 29% from 31.8%.

Kodak also said that it will cut even more jobs than previously anticipated, letting go up to 10,000 more employees. All told, Kodak is laying off about a third of its workforce as it restructures its traditional operations.

Net cash provided by operating activities from continuing operations is now at negative $207 million, as compared to positive $60 million this time last year. Debt increased by $1.4 billion to $3.72 billion, with cash on the balance sheet falling to $533 million from $1.26 billion six months earlier.

It's been clear for quite some time that Kodak has had a lot of catching up to do because consumers have quickly and enthusiastically taken up digital photography. Judging by second-quarter results, Kodak hasn't played catch-up quite fast enough, despite its attempts to do so.

A snapshot of the company's conference call illustrates the challenges right from the get-go. Although Kodak CEO Antonio Perez didn't say that its digital strategy is failing, he admitted that the initiative needs to be "dramatically" accelerated, in light of the fact that sales of Kodak's traditional products are declining faster than previously anticipated, and success in digital initiatives didn't do enough to offset the problems.

Kodak stock dropped over the course of the past couple of months as it became clear that the company is struggling with this new wave in photography. Yesterday, Kodak shares dropped precipitously, but that drop eased over the course of the day.

Perhaps one day Kodak will turn things around and reveal itself as the sort of value that Motley Fool Inside Value guru Philip Durell looks for on a regular basis. In the meantime, though, it seems pretty clear that Kodak has tough times ahead as it works to transform itself.

Have you migrated to digital? Or do you still use an old-fashioned film camera? Do you have questions on photography, or are you an expert in your own right? Discuss your own photographic hobby and habits on our Photography discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.