Novell has recorded a $12m drop in revenues for the first quarter of 2007.

The networking software firm reported net revenues of $230m for the period ending 31 January, (Q1 '06: $242m). Novell posted net losses of $19.9m for the quarter, resulting in a loss per share of $0.06, compared with net profits of $1.8m and flat earnings per share for the same period last year.

The results fell short of analysts' expectations of per share earnings of $0.01 and revenue of $233m. Shares in Novell fell six per cent today.

Although Wall Street reacted unfavourably, there was some positive news for Novell in the results, as it reported $15m of revenue from Linux products, up 46 per cent from last year. Despite the boost in Linux sales, revenue from Identity and Access Management was $24m, down seven per cent compared with the first quarter of 2006. Combined revenue from Open Enterprise Server and products related to NetWare dropped 18 per cent.

"We are very pleased with our first quarter Linux results and momentum," said Ron Hovsepian, president and chief executive of Novell, in a statement.

"We have made good progress toward implementing our strategic initiatives and achieving our key fiscal year 2007 milestones. Overall, our quarterly results were mixed and we will need to improve our execution in our identity, security and systems management businesses. We feel confident that we are on the right path to put Novell on target for sustained profitability."

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