Corel warns of revenue slump, blames Windows line
- — 23 December, 1999 11:11
Citing poor sales of its Windows products, softness on the software retail market and high operational costs, Corel announced yesterday that, based on preliminary estimates, it expects to post a loss of 14 cents per share on revenue of $US61 million for the fourth quarter ended November 30, 1999.
This compares with revenue of $67.2 million and net earnings of 10 cents per share in 1998's fourth quarter. Corel still expects to post earnings of 5 cents per share for the fiscal year.
"Our sales of Windows products weren't as strong as expected," said Michael Cowpland, Corel's president and chief executive officer.
The consensus forecast of four analysts polled in November by First Call had Corel posting earnings of 12 cents per share in the fourth quarter and earnings of 24 cents per share for the fiscal year.
Corel's stock, which has been on a rollercoaster ride over the past year, closed at $18.56 per share yesterday, and had plunged to $14.12 at press time. The 52-week high of Corel's stock is $44.50 and its low is $2.
The company expects its Linux products to help it recover from its revenue slump, officials said during the call.
"While these slow Windows sales of Q4 are a disappointment, it's very important to recognise that the recent excitement about Corel's stock has been focused almost entirely on the outstanding progress we've been making on Linux, and this setback in the Windows market will encourage us even further to push harder into the enormous potential of Linux," Cowpland said.
Corel expects to report final results for the quarter and the fiscal year on January 18.
On a related note, Corel also announced yesterday that it acquired a 33 percent stake in LinuxForce, a Philadelphia-based company that provides Linux services and support.