NEW YORK (CNNMoney.com) - Novell stock tumbled Friday after the company posted a big drop in first-quarter profit and issued a warning for the second quarter.

Novell (down $1.59 to $7.94, Research) shares sank about 16 percent in heavy midday trading on Nasdaq.

The maker of networking software said late Thursday that first-quarter net income fell to $1.8 million from $392 million in the same period last year. The company had benefited from a $448 million settlement with Microsoft last year.

Novell issued a warning that second-quarter revenue would be between $272 million and $282 million.

Novell's first-quarter revenue also fell -- to $274 million from $290 million.

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Novell and Intel are both dragging the market down Friday -- Get the full story here.

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