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Novell 4Q beats Street
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November 24, 1998: 7:56 p.m. ET
Maker of network software sees its revenues jump in all areas but Asia
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NEW YORK (CNNfn) - In reporting its fourth-quarter earnings Tuesday, Novell Inc. showed that its recent efforts to improve its fiscal performance were taking hold and creating profits that exceeded analysts' expectations.
The Provo, Utah-based company reported that for its fiscal fourth quarter ended Oct. 31, net income was $42 million, or 12 cents per diluted share, up from $7 million, or 2 cents per share, in the year-ago period.
Analysts had anticipated profits of 9 cents a share, according to research firm First Call Corp.
Novell, a leading provider of network software and directory services software, said quarterly revenues were $298 million, an 11 percent increase on the $269 million it posted in the year-ago period.
Since April 1997, with the arrival of chairman and CEO Eric Schmidt, Novell has made concerted efforts to improve its overall fiscal performance by slashing its payroll, firing senior officers and redirecting its networking products to take advantage of Internet standards in an attempt to fend off Microsoft Corp. and its Windows NT platform.
"Our strategy is clearly working. Initial customer response to NetWare 5 and new Novell partnerships demonstrate that the market increasingly recognizes that directory is vital to managing information resources in an Internet world," Schmidt said in the company's earnings announcement.
Among the factors boosting fourth-quarter profits, the company cited year-over-year increases of 30 percent in its revenues from associated network infrastructure and application software, a 22 percent increase in its customer service, network training and consulting revenues, and a 16 percent increase in revenue from directory-enabled servers.
The company's revenues also jumped between 9 and 23 percent in all geographic areas except for the Asia Pacific, where they fell 39 percent from the prior year to $21 million.
Year-to-date results
For the full fiscal year, Novell reported net income of $102 million, compared with a loss of $78 million in 1997. Its earnings-per-share on a diluted basis were 29 cents, compared with a loss of 22 cents per share last year. The 1997 loss included a 10-cents per-share loss due to restructuring.
For all of fiscal 1998, revenue was $1.08 billion, compared with $1.0 billion in fiscal 1997.
Shares in Novell (NOVL) closed down 5/8 to 17-3/8 in Nasdaq trading Tuesday.
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