September 25, 2002 2:01 PM PDT
Loss grows for Corel
The company recorded a net loss of $59.1 million, or 64 cents a share, for the quarter, which ended Aug. 31. That compares with a profit of $500,000, or 2 cents a share, in the same period a year ago. Total revenue was $31.3 million, compared with $34.2 million a year ago.
Excluding the write-off of goodwill charges, last quarter's loss totaled $8.2 million, or 9 cents a share. On that basis, analysts polled by research firm First Call expected Corel to report a loss of 8 cents a share.
Corel, once a major player in graphics programs and other types of software, has seen its fortunes erode in recent years, resulting in several rounds of layoffs and a change in chief executive.
The company announced several deals in recent months to capitalize on its WordPerfect office software, including an arrangement in which Hewlett-Packard will bundle WordPerfect with all new consumer PCs, in place of more expensive Microsoft software.
Corel said in that earnings release that revenue was up about $500,000, or 2 percent, over the second quarter of the year, due mainly to increased sales of WordPerfect to government buyers and to the release of a new version of CorelDraw graphics software. CEO Derek Burney blamed the higher-than-expected loss on increased advertising and marketing costs to support new products.
Corel said it expects fourth-quarter revenue to rise to a range of $34 million to $38 million. The company plans to reduce costs by $2 million to $3.5 million each quarter, the company said, to return to profitability late next year. "Today's economy is challenging for software sales, but not insurmountable if you have the technology and know-how," Burney said in the statement.