STOCKS TO WATCH: Corel, Micron Electronics and 3Com

The embattled software developer gave its critics more ammunition Monday when it posted a wider-than-expected loss in its first quarter, 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.

For all the talk about it becoming a Linux "powerhouse," Corel's first-quarter Linux sales actually slipped to $2.3 million from $3.2 million last quarter.

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.

The PC maker should gain ground Tuesday after it raked in $6 million, or 6 cents a share, on sales of $334 million.

First Call consensus expected the PC maker to pocket 4 cents a share in the quarter.

Its shares closed off 7/16 to 17 5/16 ahead of the earnings report.

The $334 million in sales marks an 11 percent decline from the year-ago quarter when it earned $4 million, or 4 cents a share, on sales of $374 million.

Gross profit margins for the quarter improved to 20 percent from 17 percent in the year-ago quarter but fell from the 24.6 percent it achieved in the first quarter.

In the quarter, Micron Electronics' Internet access and hosting services businesses reported sales of $7.2 million, up 73 percent from the first quarter. Its paid hosting accounts jumped 104 percent to 34,900 accounts.

The network-equipment maker will be very active Tuesday after it posted a better-than-expected profit in its third quarter and announced a restructuring plan as well as several new partnerships.

In the quarter, 3Com earned $97.4 million, or 27 cents a share, on sales of $1.42 billion.

Analysts were expecting a profit of 25 cents a share in the quarter.

In the year-ago quarter, it earned $89.7 million, or 24 cents a share, on sales of $1.41 billion.

Company officials said the new-look 3Com will focus more on selling to small-and medium-sized businesses.

Its shares closed up 9/16 to 68 9/16 ahead of the announcements.

Separately, 3Com announced a pact with Copper Mountain Network (Nasdaq: CMTN), a maker of digital-subscriber-line equipment, to offer service provider customers DSL hardware and services from Copper Mountain. 3Com will resell Copper Mountain's CopperEdge DSL concentrator hardware, used in central offices, as well as the company's other equipment, under the 3Com brand name.