Corel's loses $23 million in 2Q as sales fall 48 percent

Corel delivered the disappointing second-quarter results it promised last week, posting a loss of $23.6 million, or 36 cents a share, on sales of $36.6 million.

First Call Corp. consensus had the Canadian software developer pegged for a loss of 40 cents a share this quarter.

Ahead of the earnings report, Corel (Nasdaq: CORL) shares closed up 1/2, or 14 percent, to 4 3/16.

The $36.6 million in sales marks a 48 percent decline from the year-ago quarter when it earned $9.7 million, or 14 cents a share, on sales of $70.5 million.

It exited the second quarter with $9.8 million in cash compared to $18 million in the year-ago quarter.

"We've faced some challenges over the past three months but we've also enjoyed some noteworthy product successes," said CEO Michael Cowpland in a prepared release. "We are continuing our tradition of innovative product development, forging strong partnerships, acquiring complementary technologies and earning praise from the industry for our efforts."

Cowpland on Saturday told the Globe and Mail that things were looking up, saying cuts in "a lot of discretionary areas" will help Corel post a profit in its fourth quarter. He said those cuts would not include more layoffs.

Analysts are currently expecting a loss of 9 cents a share in the fourth quarter.

Last week, Corel braced investors for the worst when it warned that its second-quarter sales would fall somewhere between $37 million to $38 million in the quarter.

Company officials said it recorded one-time costs in the second quarter resulting from its failed merger with Inprise/Borland Corp. (Nasdaq: INPR) and a gain from the sale of GraphOn Corp.

Earlier this quarter, Corel said it would cut 320 employees, or 21 percent of its workforce, in an attempt to cut its operating costs as well as make itself more attractive to a potential buyer.

Last quarter, Corel missed analysts' estimates, losing $12.4 million, or 19 cents a share, on sales of $44.1 million.

First Call Corp. consensus expects it to lose $1.16 a share in the fiscal year.

Its shares moved up to a 52-week high of 44 1/2 in December, mainly on the buzz surrounding its entry into the Linux operating systems software market, before falling to a low of 2 13/16 in May.