Corel 4Q operations in line with previous caution
Corel (Nasdaq: CORL) confirmed its earlier warning of fourth quarter operational losses.
After market close Monday, the software vendor reported a fourth quarter loss of about $9.9 million, or more than 14 cents per share, excluding a one-time tax gain. That's about in line with the company's warning last month.
Including a one-time tax gain of $14.5 million, Corel earned $4.6 million, or 7 cents per share. Corel recognized tax credits and losses that had been deferred until the completion of a review conducted by the Canadian government regarding the tax years 1993 through 1995.
Revenue for the quarter ended Nov. 30 fell to $60.9 million, down 9 percent from the year-ago period, when Corel saw revenue of $67.2 million. The company previously said the fourth quarter saw disappointing retail sales of its productivity software, along with unexpectedly high expenses.
For the fiscal year 1999, Corel earned $16.7 million, or 26 cents per share, on revenue of $243.1 million, compared to a loss of $30.4 million, or 51 cents per share, on revenue of $246.8 million in 1998.
Company executives said Corel's finances remain strong.
"Overall, Corel has made significant progress in restoring its financial base while at the same time, maintaining the momentum of its flagship CorelDRAW and WordPerfect brands," said Michael O'Reilly, Corel's outgoing CFO. "It is now in a strategic position to move forward aggressively to leverage those strengths into the Linux marketplace."
In recent months, Corel stock has drawn attention because of the company's Linux projects. Corel's version of the Linux OS generated $3.2 million in fourth quarter sales. Corel has complained of being valued lower than other Linux companies, such as Red Hat (Nasdaq: RHAT).
"It should now be clear to everyone that Corel is financially among the top Linux players," said Michael Cowpland, Corel's president and CEO.
Shares of Corel rose as high as 23 5/8 in afterhours trading. The stock closed Monday's regular session at 20.
Other companies reporting quarterly results:
First Call consensus expected Cobalt to lose 17 cents a share in the quarter.
Ahead of the earnings report, Cobalt shares closed up 6 to 88.
The $9 million in sales represents a 343 percent improvement compared to the year-ago quarter when it lost $4.3 million, or $1.82 a share, on sales of $2 million.
For the year, Cobalt lost $23.7 million, or $3.43 a share, on sales of $22.8 million compared to a loss of $11.3 million, or $5.48 a share, on sales of $3.5 million in fiscal 1998.
"We are very pleased with our record revenue and tremendous growth in our first quarter as a public company," said CEO Stephen DeWitt in a prepared release. "Cobalt's software intensive server appliances are rapidly being recognized by world-class service providers as unparalleled solutions for delivering highly profitable application hosting services."
Cobalt shares roared up to a 52-week high of 172 in November before falling to a low of 74 1/8 earlier this month.
Four of the five analysts following the stock maintain either a "buy" or "strong buy" recommendation.