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Novell beats estimates by a penny in Q3

Novell beats estimates by a penny in Q3

Novell yesterday reported third-quarter income of $US49 million, or 14 cents per share, doubling its per-share earnings from a year ago and beating estimates by one penny.

Nine brokers polled by First Call predicted Novell would earn 13 cents per share for the quarter, which ended on July 31.

Revenue increased 20 per cent to $327 million, from $272 million in the same period last year. Earnings a year ago were $27 million, or 7 cents per share, Novell said.

The company's revenue from operations was $87 million, a figure that was offset by expenditures for share repurchase, fixed assets and two acquisitions: Ukiah Software and Netoria. The costs of the acquisitions were not disclosed.

The company said delivering products to market quickly boosted its earnings results.

"During the third quarter, the pace of new product deliveries from the company increased and will carry into fiscal 2000," said Eric Schmidt, Novell chairman and chief executive officer, in a statement.

Notably, the company released Novell Single Sign-on, which allows people to log into a network once to access different applications. That product "indicates where we are headed with important new offerings that manage critical issues of network identity", Schmidt said.

Before the end of the year, Novell plans to bring to market products that address electronic commerce infrastructure, quality of service, policy-based management, personal identity control, caching performance and public key security, the company said.

In particular, Novell will release a directory-enabled caching product that allows caching services to be integrated with other applications and services on a network, the statement said. Novell already offers the Internet Caching System.

Geographically, Novell's revenue in Europe, the Middle East and Africa increased 39 per cent to $100 million, on strong gains in Germany, the UK, France, the Netherlands, Spain and Russia. In Asia-Pacific, revenue grew 27 per cent to $24 million, primarily from strong sales in Australia, Japan and Taiwan. US revenue was up 13 per cent to $183 million, and in the Americas region, outside the US, revenue was up 4 per cent to $20 million.

On a product basis, revenue from the company's NetWare server software was up 27 per cent to $175 million, directory-enabled applications revenue grew 34 per cent to $75 million, and revenues from new directory-related IT consulting services increased 43 per cent to $49 million. Older pre-directory product sales declined 37 per cent to $28 million.

Regarding the stock repurchase, the company spent $57 million during the quarter to repurchase four million shares of Novell common stock. On June 5, Novell's Board of Directors authorised the repurchase of up to 10 per cent, or about 35 million, shares of stock over 12 months. Then, on July 26, the board authorised up to $500 million for a share repurchase program through to October 31, 2000, "with the intent of offsetting the impact of exercised stock option", the company said in the statement. "The objective of the new plan is to maintain a fairly constant weighted average share count of approximately 350 million shares."

Novell is also increasing funding for two of its programs that participate in venture capital activities, authorising $170 million to be invested.

Novell's stock closed down 75 cents to $24.88 on the Nasdaq stock exchange yesterday.


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