Novell Q1 earnings just under expectations

Novell last week reported first quarter earnings of $US29 million, or 8 cents per share, on revenue of $286 million, attributing the result to strong sales of NetWare 5 and new directory-related software.

The 8 cents per share earnings were one cent less than the 9 cents per share analysts polled by First Call had expected the company to report for the quarter, which ended January 31, 1999.

The revenue for the quarter was 13 per cent higher than the $252 million reported for the first quarter of fiscal 1998 when the company also reported earnings of $14 million, or 4 cents per share.

Novell's Australian and New Zealand operations recorded 18 per cent growth or 9 per cent in $US compared to the same period a year ago.

Cliff Smith, Novell's local managing director, said in a statement the company achieved growth in its licensing business across all categories.

Eric Schmidt, Novell's chairman and chief executive said: "From network caching to central management of NT workstations, Novell Directory Services (NDS) is opening up new product opportunities for the company."

The three segments of Novell's business that are directory-related accounted for 88 per cent of total revenue in the quarter and grew 27 per cent over last year. Revenue from directory-enabled NetWare servers totalled $146 million, up 16 per cent from the first quarter last year. Network applications, including GroupWise, ManageWise and Z.E.N.works, increased 50 per cent from the prior year to $53 million. Infrastructure products that are directory-enabled increased 68 per cent to $15 million.

Meanwhile, service, training and consulting revenues were up 31 per cent to $37 million. Older pre-directory products represented the remaining 12 per cent of Novell's revenue, including NetWare 3, TCP/IP connectivity and Unix-related royalties. These products declined a total of 35 per cent over last year to $35 million.

Geographically, revenue in the US was up 9 per cent year on year to $156 million. In Europe, the Middle East and Africa, revenue increased 31 per cent to $94 million. Revenue was relatively even as compared with last year in Asia-Pacific at $22 million, and it was down slightly in the Americas region at $14 million.

Novell stock was up 1.87 to $20.87 at the end of the trading day following the announcement on the Nasdaq stock exchange.

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