Corel has reported another bad quarter, with sales of $45.5 million and a loss of $21.1 million.
The poor result was attributed to the effect of a just-in-time product distribution model, which resulted in a shrinkage of product in the channel in excess of $20 million during the quarter.
Additionally, price protection payments to the channel as a result of Corel's price cuts on its WordPerfect suite cost a further $11.2 million.
Corel counts a sale when the product is delivered to the distributor, but net sales from distributors to resellers was $80 million for the quarter.
This would have resulted in a comfortable profit on the quarter had the product movements from Corel to distributors been in balance with those from distributors to resellers. Assets were $73 million, with $18.9 million in cash and short-term investments. Expenses were reduced in all categories, but advertising has been reduced by $14 million a year. This is because, with the rationalisation and focusing on core products in 1997, it is no longer necessary to advertise so widely.
Adobe Systems has blamed a decline in Macintosh sales as well as weak demand in Asia for a shortfall in its results. In its first quarter, Adobe had revenue of $197.8 million, down from $226.5 million last year. Its first quarter earnings were down to $45.4 million. The company took an investment gain and acquisition related charge of $4.2 million. Application products revenue for the first quarter was $156 million, compared to $175 million for the same period last year. Macintosh revenue was down 36 per cent, while Windows revenue jumped 18 per cent during the quarter. Adobe's sales from Windows applications stand at 44 per cent.
Datrontech Group's restructuring and diversification into networking and services has dragged annual pre-profits down as the distributor posted #6.1 million in the period to 31 December 1997, down 25 per cent from #8.1 million last time. It incurred unspecified one-off costs of #1.1 million. Turnover was at #259 million, up from #197.3 million in 1996. Datrontech will increase its gearing in the forthcoming year from 400 per cent in 1997, due to a deferred payment consideration.
Tech Data, the US distributor, saw a net profit in the year ended 31 January of $89.5 million, up from $57 million the year before. Turnover increased by 53 per cent to $7 billion, from $4.6 billion last year. Figures include a full quarter of results for the distributor's German subsidiary, Macrotron, acquired in July 1997.
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