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

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



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