STOCKS TO WATCH: Corel, Intel, Oracle and Verity

Corel should provide some interesting theater Wednesday as investors react to its latest dismal earnings report.

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.

Its 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.

The chipmaker will see plenty of action Wednesday after announcing it will take a second-quarter charge of $200 million, or 2 cents a share, to replace defective motherboards.

On the bright side, it also said its earnings from interest and other investments will be more than triple what it expected.

Intel shares closed up 1 13/16 to 138 5/16 ahead of the news.

Company officials now say it expects other income of about $2.3 billion in the quarter, up from the $725 million it predicted earlier this quarter.

It said users of the company's 820 chipset motherboards, which hold all the chips that run a PC, had problems with their machines shutting down, freezing up or losing data.

First Call Corp. consensus expects Intel to earn 71 cents a share in its second quarter.

On Monday, a pair of analysts raised their earnings estimates on the chipmaker.

Last quarter, Intel hurdled the Street estimate, posting a profit of $2.73 billion, or 78 cents a share, on sales of $8 billion.

Oracle really outdid itself in its fourth quarter, posting a profit of $926 million, or 31 cents a share, on sales of $3.4 billion.

Analysts were looking for a profit of 25 cents a share.

On a conference call with analysts, Chief Financial Officer Jeff Henley called the first quarter deal pipeline "stunning."

"The first quarter pipeline is stunning, awesome," he said. "I don't know how to describe it. We've had healthy pipeline growth, but this is stunning."

The key to this quarter's upside surprise were improved operating margins-- 41.1 percent compared to 27.4 percent in the year-ago quarter-- and a 61 percent jump in application software sales.

Its shares closed unchanged at 86 but fell to 82 1/16 in after-hours trading.

The $3.4 billion in sales topped most analysts estimates and marked a 17 percent improvement from the year-ago quarter when it earned $498 million, or 17 cents a share, on sales of $2.9 billion.

Including gains made from a variety of investments, Oracle earned $4.9 billion, or $1.63 a share, in the quarter.

In the quarter, applications software sales jumped 61 percent to $447 million, with CRM sales surging 161 percent. Database software sales rose a modest 12 percent to $1.2 billion while consulting and support sales inched up 7 percent to $1.5 billion.

Count on Verity shares moving higher Wednesday after it blew away analysts' estimates in its fourth quarter, raking in $11.6 million, or 32 cents a share, on sales of $30.4 million.

First Call Corp. consensus predicted it would earn 15 cents a share in the quarter.

Ahead of the earnings report, Verity shares closed up 1/2 to 42.

The $30.4 million in sales represents a 58 percent improvement from the year-ago quarter when it earned $5 million, or 17 cents a share, on sales of $19.3 million.

For the fiscal year, Verity pocketed $30.4 million, or 87 cents a share, on sales of $96.1 million compared to a profit of $12.1 million, or 44 cents a share, in fiscal 1999.

Including income tax gains, Verity made $14.2 million, or 39 cents a share.

Last quarter, Verity topped analysts' estimates, earning $12.2 million, or 34 cents a share, on sales of $29.2 million.