Shares slump as Novell posts loss
Linux investment to blame
Shares in software company Novell slumped on Wednesday after the company posted a $16m loss in its second quarter results.
The loss was attributed to Novell's increased investment in repositioning the company as a Linux provider. After the announcement, shares in Novell fell seven per cent in after-market activity.
Despite foreign currency exchanges adding $8m in revenue, Novell failed to meet Wall Street expectations of $0.03 per share in quarterly profits on revenue of $301.9m. Reported revenues increased by $3m on last year's figures, reaching $297m.
The $16m loss translates into $0.04 loss per share, the same loss suffered in the second quarter of 2004. A year earlier, the company posted a $15m loss.
New license revenue also fell compared to the previous year's figures, reaching only $45.8m in comparison to $60.3m in 2004. Cash and short-term investments were $1.6bn as of 30 April 2005, compared with $1.7bin at 31 January 2005.
Excluding restructuring costs and other expenses, the company broke even with $1m net income. In the same period in 2004, the figures were a more robust $14m, or $0.03 per share.
Despite the disappointing results, Novell chairman Jack Messman remained upbeat. "Our results this quarter reflect the significant investments we are making to reposition Novell," he said. "I am confident that these investments will lead to increased customer acceptance of our solid solution offerings in the Linux and identity driven computing segments."
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