Corel has warned that a sharp drop in retail sales is likely to hit its third quarter figures and expects to post an increased loss of $32 million.
The loss is a shocking 10 times larger than the same quarter last year when the PC applications supplier reported losses of $3.2 million or 5 cents per share. Its revenues are also expected to plummet to $54 million from $85 million last time.
Corel's shares fell 13 per cent or 82.81 cents on the news yesterday, with the figures well below Wall Street estimates of earnings of 3 cents per share.
The company explained that although it had shipped $96 million worth of orders, it could not book all of it as revenue due to US accounting rules. It was also quick to point out that, while 95 per cent of its revenues came from two products, the WordPerfect suite and CorelDraw, sales to corporates had increased by nearly 35 per cent over the past year, reducing its reliance on the saturated retail market.
Sales of both of its flagship products were lower than usual, Corel said, although it expected this to pick up next quarter in the run-up to Christmas, but the firm also admitted it was holding excess inventory.
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