Corel Q2 loss widens, sales slump
In line with predictions
Corel's recent prediction of a widening Q2 loss and falling revenues proved pretty close to the mark yesterday when the Canadian software company announced its second quarter results.
For the three months period, the company lost $23.6 million - right in the middle of the $22-24 million range it had warned its loss would fall into - on sales of $36.6 million. The company also reported a $1.1 million loss from equity investments, balanced by a $1.2 million gain from the sale of 560,000 GraphOn shares.
For the same period last year, Corel reported revenues of $70.5 million - yesterday's figures mark a 48 per cent fall year on year - and $9.7 million in profit.
That said, Corel CFO John Blaine was bullish about the company's prospects. "What we're saying now is that if we are successful in the implementation of our cost-savings plan, that the results for our Q3 are expected to be better than both Q1 and Q2.''
Possibly. Ridding itself of 320 workers will save Corel some $11 million in salary payments, but that still leaves severence pay. It also leaves some $29 million to be found to make up the $40 million Corel needs to save through cut-backs. The C$30 million ($20.5 million) funding the company found after the Inprise/Borland merger collapsed will help.
Still, it's hard to see the company's revenues rebounding. Corel is happy to shout about how Linux is going to bring in major rewards, but the open source OS contrinbuted only $2.6 million to the Q2 sales, so it's a long way from being the company's mainstay. Though if sales of its application software continues to fall off so rapidly, Linux could quickly become one.
Revenues for Q1 2000 were $44.1 million, with a loss of $12.4 million. ®
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