Thursday, Novell, Inc. (NOVL), a developer of mixed source and open source software, reported a wider net loss for the third quarter, despite a rise in revenues, on an impairment charge related to auction-rate securities. The company also reiterated its revenue guidance for fiscal 2008.
Monday, open source solutions provider Red Hat, Inc. (RHT) reported a 7% increase in earnings for the first quarter, as subscription revenue rose 27% over the year-ago period. Total revenue for the quarter grew 32% from the previous year.
Waltham, Massachusetts-based Novell said third quarter net loss widened to $15.13 million or $0.04 per share from $3.68 million or $0.01 per share reported last year. Net income on a non-GAAP basis increased to $20.84 million or $0.06 per share from $18.76 million or $0.05 per share reported last year.
On average, 8 analysts polled by First Call/Thomson Financial expected earnings of $0.05 per share for the quarter.
Income from operations for the quarter was $971,000, compared to a loss from operations of $10.12 million for the third fiscal quarter 2007. On a non-GAAP basis, income from operations grew to $24.22 million from $14.40 million in the prior year.
Loss from continuing operations was $15 million or $0.04 per share due to a $15 million impairment charge related to auction-rate securities. This compares to a loss from continuing operations of $4 million or $0.01 per share for the third fiscal quarter of 2007.
On a non-GAAP basis, income from continuing operations for the third fiscal quarter of 2008 was $21 million or $0.06 per share, compared to $19 million or $0.05 per share for the third fiscal quarter 2007.
Third quarter net revenues rose 4% to $245.19 million from $236.79 million reported in the year-ago quarter, exceeding Street expectation of $241.43 million.
Revenue from software licenses grew 27% to $53.41 million, while Maintenance and subscriptions segment generated $154.98 million, up 8.5% from last year. Revenue from Services, including professional services, technical support and training services, dropped 25% to $36.80 million from the year-ago period.
For the third quarter, Novell reported $33 million of product revenue from Open Platform Solutions. This included $31 million from Linux Platform Products, up 30% year-over-year. Product revenue from Identity and Security Management was $37 million, with Identity and Access Management revenue rising 22% year-over-year. Product revenue from Systems and Resource Management increased 25% to $47 million. However, Workgroup product revenue of $92 million slipped 1% from last year.
Total cost of revenue for the third quarter declined to $60.17 million from $66.52 million in the same quarter of the previous year.
Cash and cash equivalents at July 31, 2008 was $973.84 million, while it was $1.079 billion at October 31, 2007. Receivables for the same periods were $212.92 million and $208.32 million, respectively.
Year-to-date, the company reported net income of $7.55 million or $0.02 per share, compared to $26.51 million or $0.08 per share reported last year. Total net revenue rose to $711.78 million from $687.56 million in the previous year.
Looking forward, the company continues to expect net revenues for fiscal year 2008 to be between $940 million and $970 million. The Street currently estimates revenues of $948.48 - $951.82 million with a consensus of $958.53 million.
Novell raised non-GAAP operating margin guidance for fiscal year 2008 to between 8% and 10%, exceeding the previous guidance of between 7% and 9%.
NOVL closed Thursday's regular trade at $6.01, up $0.10 or 1.69%, on 2.81 million shares. The stock dropped $2.33 in the extended trade. For the past year, the company trended in the range of $5.25-$8.10.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.