Novell Boosts Outlook as 3Q Loss Narrows

Novell Inc. posted a fiscal third-quarter loss of $3.4M ($0.01/share), half of the $6.5M ($0.02/share) loss reported a year earlier, as revenue rose 2.9% to $243.1M from $236.3M. Excluding items, earnings were $16M ($0.05/share) compared to $24M ($0.06/share) a year ago. Analysts had been expecting adjusted earnings of $0.02/share and revenue of $234.8M, on average, according to Reuters research. Revenue from Linux Platform Products jumped 77%. The company also said it was encouraged by the stronger-than-expected showing of its Workgroup product line where revenues, which had been skidding, dropped just 2%. Sales in the identity and security management business were a weak spot, up just 3% because of poor sales execution. Against that backdrop, the distributor of open source software said it now believes adjusted earnings will "exceed previously stated guidance of between break-even and $10M." It continues to expect revenue of $925M to $955M. Analysts were expecting earnings of $0.10/share and revenue of $942.5M for the fiscal year, on average. Shares gained 1.2% to $6.87 AH after rising 2.1% in the regular trading session.

Sources: Press release, Reuters, MarketWatch, The Street.com
Commentary: Court Says Novell, Not SCO, Owns Unix • Credit Suisse Says Odds Of Novell Buyout Are Low
Stocks/ETFs to watch: NOVL, IGV, SWH, PSJ. Competitors: IBM, MSFT, RHT

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