Novell stock down after revenue decline By Stephen
Shankland,<stephen.shankland@cnet.com>CNET
News.com
Published on ZDNet news: <http://news.zdnet.com/2001-1_22.html> March 3,
2006, 8:14 AM PT
-
<http://news.zdnet.com/2038-3513_22-0-company.html?id=10527&name=Intl+Business+Machines+Corp+>
*Novell's stock dropped 16 percent in morning trading Friday after the
server software company reported its revenue declined 5 percent in its most
recent quarter. *
The Waltham, Mass.-based company on Thursday reported that revenue dropped
to $274 million in the quarter ended Jan. 31, down from $290 million the
year earlier. Net income was $2 million, or break-even in terms of cents per
share, using Generally Accepted Accounting Principles. With non-GAAP
accounting, net income was $18 million, or 4 cents per share.
Novell shares dropped $1.49, or 16 percent, to $8.04 in morning trading.
Financial results indicate that Novell is losing market share to top Linux
seller Red Hat, said First Albany analyst Mark Murphy. At the same time,
Novell's older NetWare business is declining. He downgraded the stock from
"neutral" to "underperform."
"Novell's Linux revenue increased 22 percent year over year to $10.4
million. Red Hat's revenue grew 44 percent year over year to $73 million in
its most recent quarter. This indicates Red Hat is roughly seven times
larger and growing twice as fast," Murphy said in a report Friday.
"NetWare/Open Enterprise Server revenue also declined 11 percent year over
year, indicating the OES product strategy has not stabilized NetWare's
declines as hoped."
Credit Suisse First Boston analyst Jason Maynard was less pessimistic. "We
continue to believe that the Linux market opportunity is robust, and that
Novell should eventually make some progress in growing its Linux business.
The worst item in the quarter was the "disappointing" performance of
Novell's Celerant consulting business, which the company is trying to spin
off.
The company predicted revenue for the second quarter of fiscal 2006 to range
between $272 million and $282 million and non-GAAP earnings per share of 2
cents to 3 cents. That's a notch below the average analyst estimate of $284
million and 4 cents per share, Maynard said.
On 3/6/06, michael hast <evylrobot19@cox.net> wrote:
>
> John Pugh wrote:
>
> >
> >
> >Hmmm...Novell had 300% increase in subscriptions over the same period
> >last year with a substantial increase in revenue. I think you may be
> >reading some marketing FUD somewhere.
> >Novell's SUSE Linux is the leader in 64 bit systems, has the 2nd most
> >number of open source development staff (behind IBM), has firsts in 64
> >bit linux, linux on the mainframe, linux in retail (the list goes on)
> >and in the southeast has been converting RH installations faster than I
> >can keep up. Most fortune 500 in the Southeast that run linux, run SUSE
> >Linux.
> >
> >The most respected certification is most definitely LPI. Novell's CLP
> >and CLE are based on LPI, but use a practicum for evaluation so it's a
> >little different than the LPI for certification.
> >
> >I'm biased, but I view RH as a sinking ship at the moment - they have
> >one thing going for them at present - momentum, but momentum must be
> >sustained. Novell's 06Q1 numbers speak for themselves when it comes to
> >Linux growth.
> >
> >
> In today's day and age, it's nice to see someone that loves their job so
> much. I've got a pretty good one, too!
>
> --
> --Michael Hast (the evyl robot)
> I'm not picking my nose. I'm pulling things out of it.
>
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