|
Novell meets 4Q estimates
|
 |
November 23, 1999: 6:45 p.m. ET
Shift in focus yields solid quarterly, annual results, CEO says
|
NEW YORK (CNNfn) - Novell Inc. posted fiscal fourth-quarter earnings Tuesday that were in line with Wall Street's expectations, and the company's chief executive said he sees a "significant growth opportunity" for the company moving into fiscal 2000.
The Provo, Utah, company, which makes networking software, reported fourth-quarter profits of $73.8 million, or 21 cents per share, on revenue that increased 16 percent to $345 million for the three month period ended Oct. 31.
Analysts polled by First Call expected Novell (NOVL) to earn 17 cents per share during the quarter. However, the fourth-quarter results reflect a settlement Novell reached with the Internal Revenue Service for tax years 1994 through 1997, which resulted in a $15.2 million reduction in the provision for income taxes during the fourth quarter, adding 4 cents per share to the reported earnings, the company said.
Novell said strong demand for its directory-enabled applications, which are used to unify and manage different directories in a network infrastructure, contributed largely to the quarter's results.
Sales of directory-enabled applications increased 32 percent from the year-ago quarter to $90 million, led by its ZENworks remote workstation management application, BorderManager security and caching suite and Novell Directory Services for Windows NT.
Under chairman and chief executive Eric Schmidt, the company has shifted its focus onto directory-enabled products, demand for which has been increasing amid the sprawling growth of the Internet.
The company already makes directory-enabled products that run on Sun Microsystems' Solaris, Microsoft's Windows NT and it's own NetWare operating systems. By early 2000, the company expects to make them available for the Linux and Compaq's Tru64 operating systems as well, Schmidt said in a conference call with analysts after the close of trading Tuesday.
"In fiscal 1999, Novell accomplished what we said we would do," Schmidt said. "We more than doubled our growth rates around the directory products that are fast emerging as the basis for IT solutions to support and manage business growth."
The company also saw an increase in service, training and consulting revenue during the quarter, which was at $50 million, was up 37 percent from last year, and a substantial decline in its non directory-enabled products, which were off 32 percent at $29 million.
In addition to its current offering, Novell plans to introduce new software products to market in fiscal 2000 that address areas including electronic commerce infrastructure, personal identity control, quality of service, policy-based management, and cache management.
Those, coupled with an expected uptick in demand for its existing products, could help boost the company financially, with the most benefits seen coming at the end of the year, according to Schmidt.
"We see a significant growth opportunity in fiscal year 2000," he said. "In keeping with the seasonality of our business, revenue in Q1 could decline sequentially. Our model then calls for quarter-to-quarter improvement throughout the remainder of the year, with Q4 being the strongest."
For all of fiscal 1999, Novell posted net income of $190.7 million, or 55 cents per share, compared with $102 million, or 29 cents per share in fiscal 1998. Sales for the year increased to $1.3 billion from $1.08 billion last year.
Investors cheered the company's results, sending Novell shares up more than 9 percent. After losing 1-11/16 and closing 22 in Nasdaq trading, Novell shares added 2 to 24 in extended hours trading.
|
|
|
Novell
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
