Tech Industry

Another disappointing quarter for Corel

Corel posted a wider-than-expected loss in its first quarter Monday, losing $12.4 million, or 19 cents a share, on sales of $44.1 million.

First Call consensus expected the Canadian software developer to lose 16 cents a share in the quarter.

Its shares closed off 1/2 to 13 3/8 ahead of the earnings report.

The $44.1 million in sales marks a 9 percent improvement from the year-ago quarter when it lost $14.6 million, or 24 cents a share, on sales of $40.3 million.

Company officials said it expects results in the next two quarters to mirror the first-quarter financials, based on its revenue and cost structures.

"With an improved cash position since Q4 1999, and profitable investments, Corel is positioned to fund future growth," said CEO Michael Cowpland in a prepared release.

Last quarter, Corel met analysts' reduced estimates after issuing a profit warning.

At the time, CEO Michael Cowpland attributed the shortfall to problems with shipments of its Windows software and maintained that the software company should be given a valuation similar to Linux star Red Hat (Nasdaq: RHAT).

Corel's version of the Linux OS generated $3.2 million in fourth-quarter sales.

"It should now be clear to everyone that Corel is financially among the top Linux players," Cowpland said last quarter.

However, in its press release, Corel didn't bother to breakdown the amount of sales its Linux software generated in the quarter.

Making matters worse, Corel's chief financial officer, Michael O'Reilly, resigned Dec. 15.

Corel shares stormed up to a 52-wek high of 44 1/2 in December when Linux-related stocks were making huge gains. Last March, the stock was trading at $2 a share.

Both analysts following the stock maintain either a "hold" or "sell recommendation.

First Call consensus predicts Corel will earn 6 cents a share in the fiscal year.