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Broderbund slides after report

The company's stock falls sharply in midmorning trading after a report that it expects quarterly results below analysts' expectations.

Broderbund's stock slid more than 14 percent today after the company said it expects third-quarter results to be below analysts' expectations, blaming higher customer returns and customer rebates.

The educational and small-business software maker also said it hired Donaldson, Lufkin and Jenerette to explore "strategic alternatives."

"At this time we are having discussions regarding strategic opportunities," said chief executive Joe Durrett. The company had no additional comment.

Rumors have been circulating on Wall Street that Broderbund could be acquired.

Broderbund said it expects revenues for the third quarter ended May 31 to be about $52 million, and it expects a net loss of $2.5 million to $3.5 million (or 12 cents to 15 cents per share).

The company had been expected to post third-quarter results of about 1 cents per share, according to a poll of analysts by First Call.

Broderbund shares ended the day down 3 points, at 17.1875. The stock has traded as high as 37.75 and as low as 15.25 during the past 52 weeks.