Novell Slips as Q4, Full-Year Results Decline

Novell, Inc. (Nasdaq: NOVL) was down 31/32 at 6 15/16 early Wednesday after reporting lower revenue and earnings for the fourth quarter and year ended October 31st.

The Provo, Utah-based software maker said revenue for the quarter fell to US$273 million from $345 million a year earlier. A restructuring charge led to a loss of 11 cents per share, compared with income of 21 cents in the year-earlier quarter.

Excluding the restructuring charge, the company posted breakeven earnings per share, in line with analysts' expectations.

For the year as a whole, revenue slipped to $1.16 billion from $1.27 billion, and net income fell to $49 million, or 15 cents per fully diluted share, from $191 million, or 55 cents.

"Fiscal 2000 has been a very difficult year for Novell following dramatic declines in traditional packaged software sales," said chairman and chief executive officer Eric Schmidt. "Growth in new Net services did not accelerate fast enough to offset this decline."

Novell, said Schmidt, aims to improve its performance in the coming year by concentrating on Internet services. "By the end of 2001, we intend to have gained broad market recognition of Novell as an e-business Net services platform provider that delivers must-have capabilities, including security, identity, acceleration and management," he said.

Weak performance from the company's European division also hurt results, the company said. Revenue from Europe dropped 33 percent in the fourth quarter when compared to a year earlier.

While new programs designed around Net services began in October and are likely to be in place by the end of the current quarter, it will take "several quarters" before the shift in business is complete, the company said.

"We expect overall Novell revenue performance to continue to be soft until we gain the combined benefit of new e-business deployments and complete a shift in channel programs to include a new group of partners from the ranks of consulting systems integrators and other service providers," said chief financial officer Dennis Raney.