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Novell Hits Earnings Target But Sales Slip

Novell managed to meet analysts' profit estimates in its latest quarter, pocketing $20 million, or $0.06 a share, but its sales fell to $204 million from $216 million in the second quarter of 2009.

A good portion of the blame for the software developer's declining sales can be attributed to weakness in its Linux business. In the quarter, its Linux unit sales fell 4 percent to roughly $35 million.

In the year-ago quarter, Novell earned $15.6 million, or $0.05 a share.

As Datamation reports, shareholders weren't given much reason for optimism in the near term either as Novell told analysts to expect third-quarter sales and margins roughly on par with its latest quarter.

The fact that Novell recently rejected an unsolicited $2 billion bid from a hedge fund to take the company private might also be weighing on both customers' and employees' minds.

It's been a tough quarter quarter for Novell (NASDAQ: NOVL) as questions about its future ownership remain on the table. Novell is also facing pricing pressure on its Linux business as renewals come up on Microsoft's SUSE Linux Enterprise subscriptions.

Novell this week reported its second-quarter fiscal 2010 earnings, showing a decline in revenue, which came in at $204 million for the quarter, a drop from the $216 million it brought in a year earlier. On the positive side, net income hit $20 million or $0.06 per share, which is an improvement over the $16 million or $0.05 per share Novell reported for the second quarter of 2009.

But the slide in revenue continues for Novell, which provided third-quarter revenue guidance for revenues between $205 million and $210 million.

Read the full story at Datamation:
Novell Revenues, Linux Business Slide