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: editorial@rttnews.com