Wednesday September 10 2:16 PM EDT
Corel drops after pre-releasing Q3 results
TORONTO, Sept 10 (Reuter) - Shares in Corel Corp dropped 15 percent in value after the software company pre-announced negative third quarter results.
Corel stock, which resumed trading at 1030 EDT/1430 GMT after an early morning halt, fell 1.40 to 7.50.
``The negative tone of them is a little bit breathtaking,'' said one analyst who declined to be identified.
Ottawa-based Corel said it would report a loss of US$32 million for the third quarter ended August 31. It received and shipped orders for US$96 million but would recognize revenue of only US$54 million, it said.
In last year's third quarter, Corel, which has competed vigorously with Microsoft Corp (MSFT) in the office software market, lost US$0.05 a share on sales of US$85 million after product shipment was delayed.
In this year's second quarter ended May 31, Corel lost US$1.49 a share after a US$113.7 million writedown for acquisition and development costs. Without the writedown, it earned US$0.06 a share on revenues of US$100.4 million.
Analyst Stephen Frankel at Adams Harkness in Boston added that ``the company has yet to prove it has a sustainable business model.''
Frankel said he did not want to comment on the pre-released numbers until he had spoken to the company.
Corel (COSFF) officials could not be reached for comment. Corel said in its statement that ``the revenue recognition is consistent with industry practice, generally accepted accounting principles and current draft guidelines issued by the American Institute of Certified Public Accountants and is based on historical run rates.''
The anonymous analyst forecast that Corel shares would fall to 5 in Toronto by the time Corel released its fourth-quarter results.
On Nasdaq, Corel lost 0.83 to 5.63 by midday.
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What does $5 Canadian translate to in US? I don't think the worst of this is over yet. When are the official 3Q results supposed to be released?
RCY |
