Novell posts profit in third quarter

Novell in Provo, Utah, reported revenue of US$282 million for its fiscal third quarter last week, with nearly $10 million in net income and earnings of 3 cents per share.

The positive quarter was the result of better-than-anticipated business in Europe and sales of several large licenses for Web-based software in North America, said Novell Chairman and CEO Jack L. Messman.

He also attributed the stronger quarter to improved software sales of NetWare, GroupWise and several Net services products, compared with the second quarter. Software products accounted for $206 million, or 73 percent of revenue.

The results for the third quarter compare with $249 million in revenue for the same period a year earlier. For the first nine months of the fiscal year, Novell reported revenue of $834 million and a net loss of $155 million.

Despite the improvement, Messman warned, "It is much too early to get overly optimistic. ... There are a number of negative factors. The IT market environment continues to be challenging."

Significantly, he said, IT consulting declined, although Novell saw total consulting revenue double from the same quarter a year ago, to $74 million.

The consulting branch of Novell had 1,391 workers at the end of the third quarter, down from 1,503 a quarter earlier, officials said. Overall, Novell had 6,338 employees, including 455 who worked for SilverStream Software Inc. in Cambridge, Mass., before Novell acquired the Web services application development company in July.

The number of Novell employees dropped 3 percent from the second quarter, but Messman said there's no foreseeable head count reduction in store. He said he would prefer to eliminate work and not workers, taking out lines of business and moving those workers to other areas, if needed.

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