Anybody who does much in the way of graphics or design knows Corel Corp. (NASDAQ: CREL) and its products -- Corel DRAW and Corel Paint Shop. No question they are good products. But that does not mask the fact that 2Q 2008 numbers do paint paint a pretty picture. Interim CEO Kris Hagerman states that "Corel performed well in the second quarter." Given that revenues were up less than 3% and GAAP net income, another word for earnings, dropped 60% to $930,000, what would qualify in Hagerman's book as a bad quarter? It isn't necessarily how much a company makes that is most important, it is how much of that amount it gets to keep.
EBITDA is heading south and Hagerman admits the company needs to pursue "opportunities in faster growing markets." The company issued 3Q 2008 guidance of GAAP earnings per share of zero to $0.06, in line with 2Q results. Time for senior management to paint a prettier picture.
Shares closed Thursday at $10.75. The stock is up about 4% year to date.
See also: What's going on with the Corel buyout?
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