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Restructuring costs pull Novell into the red

Restructuring costs pull Novell into the red

Novell reported unexpectedly strong operating profit and revenue for its fourth quarter, though restructuring expenses pulled the company into the red.

Novell also forecast first-quarter revenue of between US$260 million and US$270 million, with earnings per share of 2 to 3 cents. That excludes an estimated 3 cents per share from expensing stock options.

The company's previously announced restructuring, which will involve layoffs of about 10% of its workforce, will hurt revenue by US$40 million to US$50 million for fiscal 2006.

For the just-finished quarter, Novell reported revenue of US$320 million, up from US$301 million in the prior year's quarter, and a net loss of US$5 million, or 1 cent per share. That compares with net income of US$14.8 million, or 3 cents per share, in the same period last year.

Linux revenue was US$61 million, including US$46 million from sales of Open Enterprise Server, up 418% from the year-ago quarter. Sales of stand-alone subscriptions to SUSE Linux Enterprise Server totaled 64,000 in the quarter. Novell also took in US$84 million from identity products.

For the entire year, Novell had sales of US$1.2 billion, compared with US$1.17 billion in the previous year.

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