Corel pins hopes on Wordperfect

Software developer is optimistic about company?s future as Suite 8 gets off to a good start

Canadian software developer Corel is looking to the newest version of Wordperfect to overturn its financial position after it announced a net loss of $105.7 million.

The loss was largely due to Corel being forced to write off $113.7 million in technology assets acquired from Novell 18 months ago. About $104.9 million of the charge related to a reduction in the value of the Wordperfect suite. Corel issued a profit warning last month (PC Dealer, 18 June).

But Corel president and CEO Michael Cowpland said in a statement that the results showed an underlying upward trend in Corel?s operating profits, and estimates for Q3 were optimistic. He also pointed out that take-up of the recently launched Wordperfect Suite 8 had been positive, with 350,000 units shipped worldwide.

John Hladkowicz, Corel director of investor relations, said Corel?s channel partners worldwide could look forward to increased margins from the product. ?Wordperfect Suite 8 is off to a good start. Sales into distribution have increased, sales into the channel have increased, and sales through retail have increased between 10 and 50 per cent. We?ve increased the pricing by 50 per cent and seen no downturn in sales.?

In its second quarter to 31 May, Corel reported sales of $100.4 million, up 14.8 per cent over 1996?s second quarter of $87.5 million. Net income for the quarter, excluding the write-down of $113.7 million in connection with acquired technologies, was $4.1 million, down from a profit of $506,000 for the same period last year.

Last week, Corel spun off a unit, which contained its video and networking computing divisions, as a wholly owned concern. It is expected that within 12 months the company will gain enough revenue from video and development work in Java to stand on its own.