Revenues flat at Novell as losses rise

22 Aug 2003

Network software giant Novell posted a slight rise of US$1m on revenues of US$283m for its third fiscal quarter of 2003, but the company made a net loss for the period. The same time last year the company recorded Q3 net income of US$10m on revenues of US$282m.

Fighting tough times, Novel made the decision during the third quarter to lower its annual operating expenses by approximately US$100m, a workforce reduction of 10pc that is envisaged to count for US$57m of the reduced annual expenses. This will bring total employment at Novell to 5,700 people at the end of the quarter. Novell employs 125 people at its EMEA operations in Dublin.

Losses continued to mount at the network operating system software firm with a net loss in the third fiscal quarter of US$12m, compared with a net income of US$10m a year ago.

For the first nine months of fiscal 2003, Novell reported revenue of US$819m and a net loss of US$53m. For the first nine months of fiscal 2002, the company reported revenue of US$834m and a net loss of US$155m.

Novell chairman Jack Messman nonetheless describes the third quarter as “encouraging” and voiced the company’s increased support for Linux and the open source movement. He said: “We took significant steps to improve Novell’s business performance through cost-cutting measures intended to enhance our profitability beginning in our current fourth quarter. Novell also continued to gain major new contracts based on the importance customers place on secure identity management and application integration solutions. The combination of these new solutions, our continued investment in NetWare development, expanding support for open standards and Linux, and the growing importance of secure Web services, strengthens Novell overall.

“In the third quarter, Novell also made important announcements regarding our Linux initiatives and the significant growth opportunities we see from this market,” Messman continued. “Novell is not diminishing support for its NetWare product line. We are adding Linux. Novell plans to deliver a full range of solutions to help customers maximise the value of investments in Linux and open source.”

By John Kennedy