EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

02.28.10

Novell’s Financial Results Disappoint Again (Revenue Misses Expectations)

Posted in Finance, GNU/Linux, Novell, SLES/SLED at 5:58 am by Dr. Roy Schestowitz

novell-boat

Summary: A look at all the coverage we could find about Novell’s financial report from Thursday

LOOKING back at the past 2 weeks, we find that Novell’s results did not surprise for the better. Here is a roundup of some posts on the subject, latter parts being more relevant than the former.

The Week Before

A week and a half before the results came out there was nothing particularly interesting in the news. Novell was just mentioned in:

Stocks At 52-Week High (MAT, CAG, ARUN, NOVL)

Novell, Inc. (NASDAQ:NOVL) made a new 52-week high of $5.03 in the morning session. In the past one year, the stock has rallied over 47%.

SmarTrend research report available on Novell

Stocks At 52-Week High (MAT, CAG, ARUN, NOVL)

Novell, Inc. (NASDAQ:NOVL) made a new 52-week high of $5.03 in the morning session. In the past one year, the stock has rallied over 47%.

SmarTrend research report available on Novell (NASDAQ:NOVL)

SmarTrend, our proprietary pattern recognition system, called an Uptrend for Novell (NASDAQ:NOVL) on January 06, 2010 at $4.53. Since then, Novell has returned 9.9% as of today’s recent price of $4.98.

It didn’t last long.

Results’ Week

Things became a little more interesting days before the results came out, with coverage including:

Unusual Trading Activity for Novell Inc (NOVL)

Interesting Options Volume for Novell Inc (NOVL)

This Weeks Earnings on Wall St

Novell Broke Resistance

Novell near Resistance

Novell Closing in to Support

Results’ Time

Here is Novell’s press release and the transcript of the Earnings Call.

Coverage then included:

Novell Guides Revenue Below Estimates

Novell Ahead of Earnings

Gap, Safeway, Blackstone

Conference Calls Today: 5-5:30 P.M. EST

Stocks Poised For Weak Open

Assured Guaranty (AGO), Crocs (CROX), Fluor (FLR), Gap Inc. (GPS), LaSalle Hotel (LHO), Novell (NOVL) and Universal Health (UHS) are among the major companies that will report their quarterly results after the markets close for trading.

Wall Street Set For Higher Open

After the markets closed for trading in the previous session, software solutions provider Novell Inc. (NOVL) reported a higher profit in its first quarter, helped lower operating expenses, notwithstanding a decline in revenues. Earnings for the quarter were in line with estimates, but revenues fell short of expectations. Looking ahead to the second quarter, Novell expects sequential revenues to be flat.

Novell profit rises as sales slip 6%

Novell 1Q Earnings Match Street’s View; Revenue Falls

Novell Inc. (NOVL) saw shares fall slightly after the company said fiscal first-quarter earnings per share were in-line with the Street’s view, but reported worse than expected quarterly revenue.

Fluor cuts yearly forecast; Gap increases annual dividend

Novell shares slump after quarterly revenue outlook

[...]

Investors pushed Novell /quotes/comstock/15*!novl/quotes/nls/novl (NOVL 4.69, -0.01, -0.21%) shares down 1.3% to $4.75 after the business software provider said it expects second-quarter net revenue “to be similar” to first fiscal quarter that ended in January. Analysts had expected second-quarter revenue of $212 million. Novell reported first-quarter revenue of $202.4 million compared with $214.9 million in the year-ago period.

Looking ahead to Novell Inc. earnings; NOVL, ASIA, MFE, CHKP

Novell, Inc. Issues Q2 2010 Revenue Guidance Below Analysts’ Estimates

Novell, Inc. announced that for second quarter of 2010, it expects net revenue to be similar to first quarter of 2010 revenue levels. The Company reported net revenue of $202 million in first quarter of 2010. According to Reuters Estimates, analysts were expecting the Company to report revenues of $212.6 million for second quarter of 2010.

Novell Q1 Profit Rises

Earnings for the quarter were in line with estimates, but revenues fell short of expectations. Looking ahead to the second quarter, Novell expects sequential revenues to be flat.

Positive spin is not exactly justified.

Further Analysis

Here is an example of how to select statistics such that they support a point of view:

Novell Net Up 89% After 2008 Charges; Shares Down On View -NOVL

Novell Inc.’s (NOVL) fiscal first-quarter profit surged 89% on higher margins and fewer charges, as the software company posted lower revenue.

Novell posts 81% increase in Q1 profits – Regional

They compare a year of financial collapse to one that is less so. They also say nothing about the small margin, whose increase on an absolute scale is rather small. Here is what a Microsoft booster had to say and also another perspective:

Elsewhere, Novell Inc. (NOVL) reported first-quarter net income of $20.2 million, or 6 cents per share, on revenue of $202.4 million. Analysts had expected Novell to post a profit of 7 cents per share on $207.6 million in revenue. Options traders had high hopes for NOVL’s quarterly report, with the stock’s SOIR of 0.17 indicating that calls outnumbered puts by a factor of more than five to one. What’s more, this ratio arrives at an annual low, meaning that these speculative investors have not been more bullishly aligned during the past year.

Here is what Novell boosters had to say, looking at just one portion of the business in isolation:

Novell: Still Looking for its Mojo

Novell’s latest quarterly financial results, revealed today, were a mixed bag for the SUSE Linux provider. Novell made progress in some areas. But didn’t really thrive in others. Where does the company go from here. The answers will likely surface at the Novell BrainShare 2010 conference (March 21-25, Utah), where Novell will strive to energize channel partners and customers? In the meantime, here’s a look at Novell’s current business condition … through the eyes of The VAR Guy.

Novell’s SUSE Linux Milestone: Proper Perspective

Initially, The VAR Guy wasn’t all that impressed with Novell’s latest financial results, announced Feb. 25. But our resident blogger overlooked one important fact: Novell’s SUSE Linux business is now break-even. That’s an important milestone — but what does it say about the broader open source industry’s march to profitability? Here are some clues.

There is a picture of a scale there, with people on one side and cash on the other. GNU/Linux in general is growing rapidly, but Novell broke even only after SUSE layoffs which cut expenses down. “Microsoft Deal Slumps,” claims Sean Michael Kerner and Timothy Prickett Morgan more or less agrees with him about Novell’s Ballnux business breaking even.

For the quarter, Novell continued its trend of ever-shrinking overall sales as its legacy NetWare operating system and GroupWise collaboration software business declines faster than SUSE Linux support revenues can fill in the gap. Total revenues for the quarter came to $202.4m, down 5.8 per cent, with software license sales plummeting 25 per cent to $21.2m (largely because of NetWare declines).

Days Afterwards

As the following chart hopefully shows, Novell’s stock responded negatively to Thursday’s report. It fell on Friday.

NOVL results in 2010

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

10 Comments

  1. JohnD said,

    March 1, 2010 at 11:52 am

    Gravatar

    And once again you continue to show us how you can select information to support your point of view as well Roy.
    This quarter’s revenue was made without an additional 25 million from M$. The basic math will show that revenues did not drop by 25 million they dropped around 12 million – less than half. Which means they actually increased their own sales by approx. 13 million. That’s not bad. At the same time you trivialize the operating margin increase by having a margin of 10.6% in this economy is pretty darn good. Improved profit margin – improving sales (outside of M$) and no major changes to cash on hand – Novell is not circling the financial drain as closely as you would have people believe. I would also point people to the significant improvement in investing performance – a swing from a loss of 40 million last year to a gain of 12 million this year. That’s good stuff.
    I will say that this financial “review” is far more balanced than previous ones.

    your_friend Reply:

    There’s a lot of talk about Novell being bought today. It will be good to see Roy’s analysis of this. Looks like they Novell be just like SCO sooner than later, that is down the drain. A company that has a major competitor like Microsoft is a major source of funding is company in big trouble.

    Roy Schestowitz Reply:

    Yes, there is a lot to be said about it.

  2. JohnD said,

    March 1, 2010 at 3:16 pm

    Gravatar

    Isn’t funny how my last submission didn’t seem to get posted?

    Roy Schestowitz Reply:

    Isn’t funny how my last submission didn’t seem to get posted?

    Akismet flagged it.

    http://akismet.com/

    JohnD Reply:

    Why?

    Roy Schestowitz Reply:

    I really don’t know. It’s an external service from WordPress, one that I don’t control. It puts many other comments in the queue (among about 100 spam/day).

    JohnD Reply:

    Perhaps my name isn’t original enough. Thanks for the info.

  3. Roy Schestowitz said,

    March 1, 2010 at 6:48 pm

    Gravatar

    And once again you continue to show us how you can select information to support your point of view as well Roy.

    I put here every single article that I found.

    JohnD Reply:

    Yes you did, which is probably the biggest reason it’s more balanced than others, but it was this comment:
    ‘They compare a year of financial collapse to one that is less so. They also say nothing about the small margin, whose increase on an absolute scale is rather small.’
    And how you organized the “supporting” articles that I was referring to. You continue to remark that Novell is in “financial collapse” while it’s public accounting records continue to refute your claims.
    I realize your goal is to focus on any negative aspects of Novell to support your cause, but I will continue to take issue with statements that I feel are false or misleading. As I stated this summary of the financial report was much more balanced than the others you have done. What I’m not sure about is why. It may be that it was an honest attempt at being balanced or it may be that there just wasn’t enough “dirt” this time around. I’m hoping for the former. Once again you did a good job of collecting related articles on this subject. Thanks for posting the links to them so readers can come to their own conclusions about the content.

What Else is New


  1. Links 26/8/2016: Maru OS Resurfaces, Android More Reliable Than 'i' Things, PC-BSD Becomes TrueOS

    Links for the day



  2. Good Job, David Kappos, Says the 'Boss' (IBM)

    Responses to the latest call against Alice (eliminator of many software patents), courtesy of the man from IBM (still paid by IBM) who was responsible for the policy that blindly approved a lot of software patents in the US



  3. Being for Patent Quality or Against Patenting Excess Does Not Make You Anti-Patents

    Like IAM, which tries to portray sceptics and critics of software patents as "anti-patents", IP Watchdog (or Watchtroll as we call it) is 'trolling' the Electronic Frontier Foundation, simply because it expressed an opinion that patent maximalists cannot tolerate



  4. Erosion of Patent Quality Enables Patent Extortion With Large Portfolios of Low Validity Rate

    Revisiting the EPO's vision of poor patent examination and the effect of discriminatory granting practices, favouring patent bullies such as Microsoft (which actively attacks Linux using low-quality and usually pure software patents)



  5. The EPO's Francesco Zaccà Presenting in Turin Alongside Patent Trolls (Like the Patent Mafia Sisvel) and Lobbyists/Front Groups for Software Patents, UPC

    Benjamin Henrion (FFII) on seeing the EPO alongside patent trolls and other nefarious actors, doing what they do best, which is undermining public interests and harming patent quality



  6. The EPO, USPTO, and Patent Microcosm Peddle Myths About Patents in Public Universities and Research

    Tackling some of the commonly-spread myths about patents as "saving lives" and "promoting research" (in practice leading to the death of poor people and promoting trolls)



  7. Large Corporations' Lobbyist David Kappos Disgraces Former Employer USPTO by Meddling in Their Affairs on Software Patents, Downplaying the Supreme Court

    The latest lobbying from David Kappos, who blatantly exploits his connections in patent circles to promote software patents and work towards their resurgence after Alice v CLS Bank



  8. Journal of Intellectual Property Law and Practice Calls the European Patent Office “Rotten”, Other Sources Scrutinise Recent Moves

    The patent office which was once known for being the best bar none is rotting under the Frenchman Benoît Battistelli, who made himself and his friends the main clients of the Office



  9. PTAB Emerges as Hero of USPTO Because Quality of Patents Improves, Software Patents Are Effectively Dead (or Dying Once Reassessed)

    With help from the Patent Trial and Appeal Board (PTAB) -- not just patent courts -- software patents drop like flies by the thousands



  10. Creative Technology, Now Operating in 'Patent Troll' Mode, Shot Down by the ITC; Jawbone Too Shot Down

    Some good news from the U.S. International Trade Commission (ITC), which may have put an end to Creative's new war on Android (using old patents)



  11. Corporate Media in India Misrepresents Startups to Push for Software Patents

    A parade of misinformation as seen in Indian (but English-speaking) press this week as questions about patentability of software resurface



  12. Links 25/8/2016: Linux Turns 25, NetworkManager Turns 1.4

    Links for the day



  13. Links 24/8/2016: More From LinuxCon, Uganda Wants FOSS

    Links for the day



  14. Links 23/8/2016: GNOME 3.22 Beta, Android 7.0 Nougat

    Links for the day



  15. The Linux Foundation Gives Microsoft (Paid-for) Keynote Position While Microsoft Extorts (With Patents) Lenovo and Motorola Over Linux Use

    This morning's reminder that Nadella is just another Ballmer (with a different face); Motorola and Lenovo surrender to Microsoft's patent demands and will soon put Microsoft spyware/malware on their Linux-powered products to avert costly legal battles



  16. Not Just President Battistelli: EPO Vice-Presidents Are Still Intentionally Misrepresenting EPO Staff

    Evidence serving to show that EPO Vice-Presidents are still intentionally misrepresenting EPO staff representatives and misleading everyone in order to defend Battistelli



  17. Battistelli the Liar Causes a Climate of Confrontation in French Politics, Lies About Patent Quality (Among Many Other Things)

    Battistelli's lies are coming under increased scrutiny inside and outside the European Patent Office (EPO), where patent quality has been abandoned in order to artificially elevate figures



  18. The Collapse of Software Patents and Patent Law Firms Trying to “Overcome” Alice

    The United States continues its gradual crackdown on software patents (which are viewed as abstract and thus unpatentable), whereas in Europe things are murkier than ever



  19. Apple's Patent Wars Against Android/Linux Make Patent Trolls Stronger

    Apple's insistence that designs should be patentable could prove to be collectively expensive, as patent trolls would then use a possible SCOTUS nod to launch litigation campaigns



  20. Links 22/8/2016: Linux 4.8 RC3, Linux Mint 18 “Sarah” KDE Beta

    Links for the day



  21. Links 21/8/2016: Apple and Microsoft Down, Systemd Spreading to Mount

    Links for the day



  22. Links 20/8/2016: Android Domination, FSFE summit 2016

    Links for the day



  23. Patents Roundup: Trolls Dominate Litigation, PTAB Crushes Patents, Patent Box Regime Persists, and OIN Explains Itself

    Another roundup of patent news from around the Web with special focus on software patenting



  24. The Cost/Toll of the 'New' EPO and Where All That Money Goes or Comes From

    The European Patent Office has become a servant of the rich and powerful (including large foreign corporations) and even its own employees now pay the price associated with misguided new policies (or 'reforms' as Battistelli habitually refers to these)



  25. Links 19/8/2016: Linux Mint With KDE, Linux Foundation's PNDA

    Links for the day



  26. The End of an Era at the USPTO as Battistelli-Like (EPO) Granting Policies Are Over

    The United States is seeing the potency of patents -- especially software patents (which make up much of the country's troll cases) -- challenged by courts and by the Patent Trial and Appeal Board (PTAB)



  27. Battistelli's European Patent Office Goes to the United States to Speak About the UPC and Software Patents

    The European Patent Office is showing its utter contempt -- not just disregard -- for the very fundamental rules that put it in its place and brought it into existence



  28. Turkey Subjected to the European Patent Convention (EPC) But Benoît Battistelli is Not?

    The ‘constitutional crisis’ at the European Patent Office in the context of Turkey, which has signed "the EPC and as such recognises the competence and the decisions of the institutions which have been introduced in the convention."



  29. Links 18/8/2016: EFF Slams Vista 10, Linux Foundation Makes PNDA

    Links for the day



  30. Links 17/8/2016: GNOME and Debian Anniversaries

    Links for the day


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts