Novell Posts Profit In Q4

Novell NOVL 120210

Software solutions provider Novell Inc. (NOVL), Thursday reported a profit for the fourth quarter over a net loss last year, helped by non-cash tax provision benefits, and lower operating expenses. However, non-GAAP earnings for the quarter declined from the year-ago period, reflecting lower revenue from both of its segments. Nevertheless, both earnings and revenues came in line with analysts' expectations.

The Waltham, Massachusetts-based company posted GAAP net income of $322 million or $0.91 per share in the fourth quarter, compared to a GAAP net loss of $256 million or $0.74 per share in the prior year quarter.

Results for the quarter included $308 million in non-cash tax provision benefits, principally to release a valuation allowance for certain net deferred tax assets.

Non-GAAP net income dropped to $25 million or $0.07 per share from of $38 million or $0.11 per share in the year-ago quarter. On average, 9 analysts polled by Thomson Reuters expected the company to earn $0.07 per share in the fourth quarter. Analysts' estimates typically exclude special items.

Fourth quarter net revenue declined to $207 million from $216 million in the same quarter last year. Nine analysts had a consensus revenue estimate of $204.08 million for the quarter.

Net revenue from Security, Management and Operating Platforms fell 2% to $128.3 million, and Collaboration net revenue decreased 7% to $78.2 million in the fourth quarter of 2010.

Total operating expenses for the quarter declined to $139.4 million from $427.1 million in the prior year quarter.

For the fiscal year 2010, Novell reported GAAP net income of $378 million or $1.07 per share, compared to a net loss of $213 million or 0.62 per share in the previous year.

Non-GAAP net income declined to $97 million or $0.27 per share from $117 million or $0.34 per share in the prior year.

Annual revenue decreased to $812 million from $862 million a year ago.

Analysts expected the company ro report earnings of $0.27 per share on revenue of $809.39 million in the previous year.

Last month, Novell agreed to be acquired by privately held peer Attachmate Corp. for $6.10 per share or about $2.2 billion in cash.

Attachmate intends to operate Novell as two business units: Novell and SUSE. Upon the closure of the deal, Attachmate will manage a brand portfolio consisting of Attachmate, NetIQ, Novell and SUSE.

The merger transaction is conditioned upon the concurrent closing of the sale of intellectual property assets to CPTN. Novell currently expects that both transactions to close in the first quarter of 2011.

Among peers, Red Hat Inc. (RHT), the world's largest seller of Linux software, reported that its second quarter profit fell 18% from last year, when the company recorded a one time tax benefit.

Novell closed Thursday's regular trading at $5.96 on a volume of 7.71 million shares. In after-hours, the share lost 1 cent.

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