Original URL: http://www.theregister.co.uk/2006/03/06/novell_profits_slump/

Profits and revenues drop at Novell

But results 'solid', firm says

By Ciara O'Brien

Posted in Financial News, 6th March 2006 10:09 GMT

Software firm Novell saw its profits slump in the first quarter of 2006, but the firm was adamant that it was pleased with its performance.

In a conference call discussing its first quarter figures, the firm described the results as "solid quarterly performance" and drew attention to growth in the identity management sector. It also commented that its Linux performance was "on track", a spokesman for the firm said.

Novell reported $274m in revenue, a year-on-year decline when compared with the $290m revenue the company took in 2005.

Net income in the first fiscal quarter 2006 was $2m or $0.00 per share. This compared to net income of $392m, or $0.90 per share, for the comparative quarter in 2005, this figure was boosted by a $448m net gain related to the settlement with Microsoft in that quarter.

Revenue in the open platforms solutions sector reached $56m, up from $14m a year ago, while Open Enterprise Server revenue reached $43m, other open platform products generated $13m. Systems, security and identity management revenue increased 20 per cent year on year.

"We are pleased with the continued improvement in the core business this quarter," said Jack Messman, chairman and CEO of Novell. "Our growth businesses of Linux, Identity and Resource Management are performing well, and we believe we will continue to see growth throughout the fiscal year."

Novell also took the opportunity on Thursday to issue a profit outlook for the second quarter. However, it fell short of analysts expectations, with Novell estimating revenue in the range of $272m to $282m. This will translate into earnings per share of $0.02 to $0.03; in contrast, analysts had been expecting $282m in revenue, and earnings per share of $0.04.

Novell employs some 125 people in Ireland, based in Sandyford. Its Irish arm carries out a number of functions on behalf of Novell EMEA, including software localisation, manufacturing, distribution, financial control, treasury and the sales operation for Irish customers and partners.

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