Some news. Geek,
Thanks for putting things in perspective. That incompetence stuff was all polemic, of course. Here's another version of what you are saying...
TORONTO -(Dow Jones)- At least one analyst is remaining bullish on
Corel Corp. despite the company's announcement Monday that it will abandon plans to develop a version of its office software based on the Java programming language.
David Kramer of RBC Dominion Securities Inc. said he will maintain
his "buy" recommendation on Corel. Kramer came out with his recommendation last week, placing a 12-month price target on the stock of C$12.
In a written comment Tuesday, Kramer said the change in strategy
doesn't affect his financial model, which was based mainly on revenue from Corel's main products - WordPerfect business software and CorelDRAW
graphics software - and minimal revenue from new Java and network computers.
"Yesterday's briefing is further proof that Corel has begun to
focus
on longer-term strategic plans, rather than jumping on every opportunity
that presents itself," he wrote.
Kramer noted that Corel recently spun off its video product line
into
Corel Computer Corp. and sold its multimedia CD ROM titles earlier this
year, "both actions taken in order to better focus on its core productivity applications."
Kramer's is one of two "buy" recommendations that a Corel
spokeswoman
said she knows of at this time. She didn't identify the other analyst.
Most other analysts have adopted a wait-and-see approach in
connection with Corel, and are waiting to determine whether the company
can produce profits since buying WordPerfect Corp. from Novell Inc. in early 1996.
Earlier Tuesday, St. Louis-based A.G. Edwards cut its rating on the
company to "maintain" from "accumulate." But Margaret Welch, a spokeswoman for A.G. Edwards, said the rating cut isn't based on news which came from Corel Monday, but rather was because of a "change in analyst coverage."
The former analyst, Jean Orr, left the firm Friday, and two
analysts,
Peter Andrew and Mark Jordan, will jointly be covering the company, Welch said. They haven't, however, been able to contact Corel and will re-evaluate their recommendation once they have talked to the company.
Corel president and chief executive Michael Cowpland said Tuesday
that the company's new strategy is "phase two" of the company's work with Java. "This is actually an escalation of our Java, not in any way a
dropping of it," Cowpland said.
Newspaper reports Tuesday implied Corel was dumping Java, but these
reports "completely misinterpreted" what the company is doing, Cowpland
said.
Corel will spend more of its research and development funds on
Java,
Cowpland said. The annual research budget of about C$80 million (US $57.6
million) won't increase, but Cowpland expects Java to account for 50% of
the budget, up from about 30% now.
In the new strategy, Corel said it is developing two new products,
WordPerfect Enterprise - or Remagen - and CorelCentral. In the old strategy, Corel was basically taking WordPerfect and rewriting it in Java.
Remagen is a Java-based "bridging technology" that allows servers
to
distribute Windows programs to Java-capable networked computers.
Corel's Office for Java is being "renamed" CorelCentral, with
additional applications, Cowpland said. CorelCentral is a family of products, built around the web-browser design, for Java network computers.
The new products are aimed at corporate markets, whereas CorelDraw
and WordPerfect have traditionally been aimed at the individual retail market. Revenue from these new products won't show up until early 1998.
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Happy Investing!
Vanni |
