(Adds closing stock price, definition of adjusted earnings. In U.S. dollars unless noted)
By Susan Taylor
OTTAWA, Oct 3 (Reuters) - Consumer software maker Corel Corp CRE.TO CREL.O beat market expectations on Friday with a third-quarter profit that was lifted by lower taxes, but it also trimmed its 2008 profit forecasts.
The company, which posted a quarterly loss last year due to a $5 million acquisition-related tax expense, said it was too early to fully determine the impact of financial industry turmoil on its operations.
“I don’t know that there’s anything specifically we’re going to change because we think that the overall economic climate is difficult or maybe getting more difficult,” Interim Chief Executive Kris Hagerman said on a conference call.
“Frankly, the climate’s been pretty tough here over the last couple of months and we’ve done OK. So we’re going to just run as hard as we can and the things that we can’t control, we’ll try to adjust to those as they develop.”
Shares in Corel, which did not discuss the buyout offers it has entertained in recent months, retreated from an initial gain of 24 percent to close down 1.75 percent $7.86 on Nasdaq on Friday.
The Ottawa-based company said it earned $1.6 million, or 6 cents a share, in the quarter ended Aug. 31, reversing a loss of $6.8 million, or 27 cents a share, a year earlier.
Closely watched adjusted profit increased 26 percent to $10.2 million, or 39 cents a share, and bettered the average analyst expectation of 34 cents a share, according to Reuters Estimates.
Adjusted earnings exclude the amortization of intangible assets and deferred financing fees, tax benefit on the amortization of deferred tax assets, stock based compensation, and other one-time charges such as restructuring, acquisition integration, special committee review and in process acquired R&D expenses.
Revenue for such products as WordPerfect, WinZip and WinDVD, rose 9.6 percent to $66.2 million.
In July, the company had forecast third-quarter net income of between break-even and $1.6 million, an adjusted profit of $8 million to $9.5 million, and revenue of $63 million to $65 million.
Corel, controlled by private equity firm Vector Capital Corp through a 69 percent stake, also adjusted its outlook.
The company lowered its 2008 net earnings outlook to between $6.5 million and $8.5 million from a previous forecast of $8.5 million to $13.5 million. It sees adjusted profit at $40.5 million to $42.5 million, versus the previous range of $40.5 million to $46 million.
Revenue is seen between $270 million to $274 million, compared with a July target of $263 million to $275 million. ($1=$1.08 Canadian) (With additional reporting by Scott Anderson in Toronto; Editing by Peter Galloway)