Novell looses US$2 million in Q2

ALTHAM, Mass. — Novell, Inc. said it suffered a loss of US$2.1 million in its second fiscal quarter ended April 30 on net revenue of US$239 million.

That compared to a profit of US$3.3 million on net revenue of $233 million for the same period in 2006.

“We were pleased with the overall results this quarter. We saw continued strength in our Linux business, improvement in our Identity business and better-than-expected results in Workgroup. Additionally, we benefited from the impact of cost control measures,” said Ron Hovsepian, president and CEO of Novell.

“While there remains a lot of work ahead of us, our business is moving in the right direction and we believe we are on track to achieve our fiscal 2007 exit rate operating margin target.”

During the second fiscal quarter 2007, Novell reported $19 million of revenue from Linux Platform Products, up 83 per cent year-over-year, and $29 million of invoicing, up 114 per cent year-over-year.

Revenue from Identity and Access Management was $23 million, up 5 per cent year-over-year. Revenue from Systems and Resource Management was $32 million, down 4 per cent year-over-year.

Revenue from our Workgroup business unit declined 4 per cent from the year ago period to $84 million.

For the full fiscal year 2007 Novell expects net revenue to be between US$925 million and US$955 million, adjusted to account for the divestment of the Salmon business consulting group this year.

The company is targeting fourth fiscal quarter 2007 exit rate operating margins of between 5 per cent and 7 per cent, rising to 12 to 15 per cent in the fourth fiscal quarter of 2008.

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