Novell squeaks past Q3 estimates

Novell just beats analysts' earnings estimates, aided by strong European and UK growth.

Novell topped analysts' estimates once again in its third quarter Thursday, earning $49m (£30.3m), or 14 cents a share, on sales of $327m. First Call consensus pegged it of a profit of 13 cents a share in the quarter.

Novell shares closed off 3/4 to 24 7/8 ahead of the earnings report.

The $327m in sales represents a 20 percent improvement compared to the year-ago quarter when it made $27m, or 20 cents a share, on sales of $272m.

Sales of the company's flagship NetWare5 server software helped Novell top analysts' estimates for the fourth-consecutive quarter.

"We are seeing excellent results across Novell's directory business," said CEO Eric Schmidt in a prepared release. "Our three areas of focus: intelligent servers, directory applications, and service, education and consulting are performing very well."

Last quarter, Novell beat Street estimates, earning $38.7m, or 11 cents a share, on sales of $315.6m. In the quarter, Novell's NetWare software accounted for $175m of the total revenue, up 25 percent from the year-ago quarter. Directory-enabled applications products grew 34 percent to $75m and training and consulting sales improved 43 percent to $49m.

Sales into Europe, the Middle East and Africa shot up 39 percent to $100m, led by strong demand from Germany, France and the UK. Asia-Pacific sales improved 27 percent to $24m and US sales grew 13 percent to $183m.

Novell ended the quarter with $992m in cash and short-term investments.

All this tremendous growth has had a very real impact on Novell's stock price. After falling to a low of 9 1/2 last August, the stock moved up to a 52-week high of 31 3/16 in July.

Once written off by Wall Street, Novell is now rated either a "buy" or "strong buy" by 11 of the 12 analysts following the stock.

First Call consensus expects Novell to earn 50 cents a share in the fiscal year.

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