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Novell begins to shine in 3Q
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August 20, 1998: 6:19 p.m. ET
Networking software concern reports better-than-anticipated net income
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NEW YORK (CNNfn) - Novell Inc. Thursday said fiscal third-quarter profits came in slightly ahead of expectations as the network software concern continues to turn its operations around.
The announcement, which came out after the market closed, sent the stock up in after-hours trading. After closing at 10-7/8 on the Nasdaq, the shares (NOVL) rose to 11-3/8.
For the quarter ended July 31, Novell said net income totaled $26.6 million, or 7 cents a share. Analysts had anticipated profits of 6 cents, according to First Call.
A year earlier, the Provo, Utah-based company reported net losses of $121.6 million, or 35 cents a share, which included a restructuring charge of $55.3 million.
"Novell is a solidly different company today than it was one year ago," Chairman and Chief Executive Eric Schmidt said.
Indeed, the company's business prospects have brightened significantly following Schmidt's arrival in April 1997. Since his appointment, Novell has slashed its payroll; fired senior officers; and, most importantly, redirected its networking products to take advantage of Internet standards in an attempt to fend off encroaching Microsoft Corp. and its Windows NT platform.
The new strategy has helped re-invigorate top-line growth. Total revenue grew to $272 million in the third quarter from $90 million a year earlier.
Novell said it will enter a new phase in its business in September with new open standards-based products that are all directory-enabled.
NetWare, the largest component of product sales, contributed $160 million in revenue in the latest quarter, representing a 15-percent increase from the fiscal second quarter. The next generation, NetWare 5, which will be based on Internet standards, is scheduled to ship in the current quarter.
For the first nine months of the fiscal year, net income totaled $59.9 million, or 17 cents a share, on revenue of $786.3 million.
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Novell
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