Novell squeaks past Q3 estimates

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

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.

Editorial standards