Corel Loss Less Than Expected, Sales Dip

Net losses for the maker of spreadsheet, word processing and graphics software in the quarter ended Feb. 28 were $3.1 million, or 4 cents a share, down from earnings of $534,000, or 1 cent a share, in the year-before period.

The company has been struggling with weak demand over the past year as its WordPerfect Office suite of software competes with Microsoft 's Word, and its CorelDraw graphics software goes head to head with Adobe Systems products.

Sales in the quarter dropped to $31.2 million, down 4 percent from $32.5 million in the corresponding quarter of 2001.

Analysts polled by Thomson Financial/First Call were expecting, on average, a loss of 5 cents a share.

"We have successfully managed our costs to match revenues enabling the company to support its current customer base while gaining traction in the enterprise market," said Corel's chief financial officer, John Blaine.

The company told investors in a conference call that it expects sales in the second quarter to range between $30 million and $35 million, with accompanying losses ranging between 5 cents and 8 cents a share.

Corel expects to spend more on marketing costs in upcoming quarters as it releases new products, and will take unspecified charges because of severance payments stemming from a recent acquisition, Corel management told investors.

Revenue growth is expected to occur when Corel starts to cross-sell its products to the corporate customers of its two recent acquisitions, Softquad and Micrografx. The company said both acquisitions are now complete, and 30 of Softquad's staff of 55 were cut, bringing Corel's full-time work force to 891.

Shares of Corel dipped 22 Canadian cents to C$2.29 in Toronto Wednesday, and fell 10 percent, or 16 cents, to $1.58 on Nasdaq. The stock has hovered between C$2 and C$5 over the past few years following a decline from a December 1999 record high of C$49.50.

The company said it has cash and cash equivalents of $114.7 million, down from $122.4 million at the end of November.

($1-$1.59 Canadian)

REUTERS

Copyright 2002 Reuters Limited. All rights reserved.

Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.

Reuters shall be not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.