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Technology Stocks : Corel Corp. -- Ignore unavailable to you. Want to Upgrade?

To: A. Reader who wrote (4217)	1/3/1998 9:40:00 AM
From: bcoch	Read Replies (1) \| Respond to of 9798

As you will read the jury is stillout on this one; Corel previews disappointing quarter : 0.88 Computer Reseller News, January 05, 1998 anuary 05, 1998, Issue: 770 Section: News Corel previews disappointing quarter Lee Pender Ottawa -- Corel Corp. continues on its rocky road. Weeks ago, the company warned that its fourth-quarter results, to be announced Jan. 13, will not meet expectations. The software maker's recent financial trouble got deeper when it released a preview of its fourth-quarter financial report on Dec. 18. Citing excess inventory in the channel, Corel said it will post a loss of $95 million and net sales of just $44 million for its fourth fiscal quarter ended Nov. 30. The expected loss amounts to $1.43 per share. Corel executives said the company experienced returns of $50 million from the channel. The loss comes on top of a loss of $31.4 million on sales of $55.8 million in the preceding quarter. Despite the bad news, executives said the company expects to record an additional $7 million in cash for the fourth quarter, raising its total cash amount to almost $30 million. Rob Enderle, senior analyst at Cambridge, Mass.-based Giga Information Group, said Corel might not see the end of 1998 as an independent entity. Corel's plans to develop Java suite applications and a network computer, coupled with the company's recent financial turmoil, might make the company an acquisition target for NC vendor IBM Corp. or Java inventor Sun Microsystems Inc., he said. Enderle pointed to Corel's office suite battle with Microsoft Corp. as a major hurdle.."[Corel] decided to make a run at a market that was already standardized on somebody else's product," he said. "It was going to eat up something like three times their resources just to make a dent. There was no reasonable possibility that they could be successful at this." However, John Shagoury, president for North America of Norwood, Mass.-based Corporate Software and Technology, said Corel's problems are basically focused in the retail and mail-order sections of the channel and that the company is not suffering in the corporate market. Corel's recent report "does not change our strategy that much at this point," he said. "We've actually seen good, positive signs from Corel," said Shagoury. "They're really focusing on the core business market." Shagoury pointed to Corel's strength in vertical markets-specifically the government and legal markets-as a key to helping the company survive. "They could make a very fine living in a lot of the verticals if they continue to invest in development." One move that will be closely watched is Corel's forthcoming foray into Java applications. Michael Cowpland, Corel president and chief executive, said the company is on track to release two Java-based applications, code-named Alta and Remagen, and a network computer in 1998. Remagen, scheduled for release in the beginning of 1998, is a Java-based Windows-to-Java bridging technology. Alta, scheduled to ship in the second half of 1998, is a platform that combines Java, XML and HTML. The network computer is slated to debut in "very early 1998," and early prototypes have gone out to partners, Cowpland said. "We are not counting on those for revenue," Cowpland said of the Alta and Remagen products. "Any revenue we obtain from those will be extra to our plans." Cowpland added that he is upbeat about the potential for the long-term growth of Java. Enderle was not as bullish about Corel's future in the Java office suite market. "I don't think they'll ever be able to count on it for revenues," he said. "They are a development house. Shagoury, however, said that selling the Java office suite is "really their opportunity" and that he would be watching the emergence of Java itself and Corel's applications very closely. "If they pick up a couple of verticals, they may end up building a nice-size business in the small- to [midsize-] business space." Copyright (c) 1998 CMP Media Inc. New Search \| Search the Web You can reach this article directly here: techweb.com C M P n e t S P E C I A