Since going public in late April, software developer Corel
Corel reported a decent second quarter this week. Revenues increased 11% to $40 million. The company sustained a loss of $4 million, or $0.19 per share, which compares to net income of $158,000, or $0.01 per share, in the year-ago period. Second-quarter net income was hurt by a one-time charge from the retirement of debt; without it, Corel's net income rose to $8.4 million, or $0.38 per share.
The WordPerfect Office suite of productivity programs is one of two key areas of Corel's business, providing an alternative to the dominant Microsoft
What's more, WordPerfect Suite faces emerging competition. Its most ominous threat may be Google
Corel's graphics and digital imaging products show greater promise for sustained growth. Consumers' increasing use of digital cameras, broadband access, and community photo-sharing sites -- like Yahoo!'s
In fact, Corel has an opportunity for a "win-win" solution, as emerging digital photo sites struggle for ways to monetize their traffic. This week, Corel announced Alta, a new platform to deliver its digital imaging software. Its partners include CNET's
In addition, Corel's extensive global distribution infrastructure gives the company an opportunity to grow its product line through acquisitions. Its recent deal to purchase WinZip, a popular compression utility, has proved successful so far; the software has roughly half a million downloads each week.
But acquisitions and new partnerships take time to evolve, and Corel may not see greater growth from its imaging business until next year. In the meantime, the Office Suite business remains subject to disruptive competitive forces. For the immediate future, the outlook for Corel's stock remains murky and blurred.
Fool contributor Tom Taulli does not own shares of companies mentioned in this article.