Corel predicts $95 million loss

The software company's expected fourth-quarter losses are substantially larger than Wall Street expected.

Mike Ricciuti
Mike Ricciuti Staff writer, CNET News
Mike Ricciuti joined CNET in 1996. He is now CNET News' Boston-based executive editor and east coast bureau chief, serving as department editor for business technology and software covered by CNET News, Reviews, and Download.com. E-mail Mike.
2 min read
The bad financial news continues to flow from
Corel (COSFF).

The software company today said it expects to report a loss of approximately $95 million, or $1.43 per share, after charges, for its fourth quarter, ended November 30. That loss is substantially larger than expected by Wall Street.

The company was expected to report a loss of 19 cents per share, according to First Call. Corel earned 9 cents per share in the same period one year ago.

The company's stock was down roughly 5 percent, to 1-29/32 per share, in early morning trading.

Corel blamed the shortfall on its goal of lowering the level of inventory in its sales distribution channel, a charge for obsolete inventory, and a reduction in the carrying value of certain acquired technologies and tax adjustments. Corel also bought back for cancellation 1.3 million of its shares, at a cost of $4.1 million.

Michael Cowpland, Corel's president and CEO, said in a statement that despite the huge loss, he sees strong demand for his company's products.

"Clearly, our sales-out in the quarter of approximately $102 million indicates that there is strong demand for our most recent product releases," Corel said.

In the preliminary estimates, Corel said it expects to report net sales of approximately $44 million for the quarter. It said cash levels increased by approximately $7 million during the quarter, with cash and short-term investments of approximately $30 million on hand at the end of the quarter.

Final results are expected to be released on January 13.

The company posted a net loss of $31.4 million, or 47 cents a share, for the quarter ending August 31, compared with a loss of $3.2 million, or 5 cents a share, a year ago.