Novell Earnings Fall, But Linux Products Offer Hope
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From a financial perspective, 2011 is not starting off particularly well for enterprise software vendor Novell. The company released its first quarter fiscal 2011 financial results this week, reporting a decline in revenues and a net loss for the quarter.
Novell (NASDAQ:NOVL) did not host an analyst call to discuss its earnings, as the company is in the process of being acquired and taken private by Attachmate in a deal valued at $2.2 billion.
For Novell's first fiscal quarter of 2011, which ended on January 31, 2011, Novell reported revenues of $191 million. The first quarter 2011 revenue is a decline of nearly 6 percent from the $202 million in revenues Novell reported for the first quarter of 2010. On the net income side, Novell reported a net loss of $18 million or $0.05 per share which is in stark contrast with the first quarter of 2010 when Novell reported a profit of $20 million. Part of the Novell first quarter 2011 let loss stems from a $31 million tax charge related to Novell bringing non-U.S. cash back into the country.
Novell's results also showed mixed performance across its product lineup.
The identity and security management product group reported first quarter revenue of $29.2 million, a decline of 5.8 percent on a year-over-year basis. Novell's collaboration solutions also experienced a revenue decline during the quarter. First quarter 2011 collaboration solution revenues hit $64.8 million a decline of 9.4 percent on a year-over-year basis.
In contrast, Novell's Linux business held its own during the quarter. Novell's Linux platform products earned $37.8 million in revenue during the quarter, an increase of 0.9 percent on a year-over-year basis.
Novell has been busy in recent months expanding its Linux solutions.
Earlier this week, Novell launched SUSE Manager as a product for managing both SUSE Linux Enterprise Server (SLES) as well as Red Hat Enterprise Linux (RHEL). In the Linux appliance space, Novell now has partnerships with IBM, Dell and SAP.
Novell is also set to update its openSUSE community Linux distribution next week with the openSUSE 11.4 release. Among the noteworthy new features in openSUSE 11.4 is the integration of the LibreOffice open source office suite. LibreOffice is a fork of the Oracle OpenOffice.org project.
In addition to integrating LibreOffice with openSUSE 11.4, Novell is now also providing commercial support for LibreOffice. Novell had previously been offering a supported version of OpenOffice.org called the OpenOffice.org Novell Edition.
Novell's first quarter 2011 earnings could well be the company's last as a publicly traded company. Novell shareholders approved the merger with Attachmate in February. The deal still requires additional approvals and remains contingent on Novell closing the sale of 882 of its patents to CPTN Holdings for $450 million.