DOW JONES NEWSWIRES
Novell Inc. (NOVL) swung to a fiscal first-quarter loss as the
software company recorded expenses for a review of strategic
alternatives and for litigation, while revenue and gross margins
slid.
In November, an investor group led by a trio of private-equity
firms reached a deal to acquire Novell for about $2.2 billion,
ending the eight-month takeover battle for the company. Novell
shareholders last month approved the deal, although the acquisition
awaits a Department of Justice request for more information
regarding a sale of some patents.
Despite its declining revenue, the company was considered
attractive because of its high cash levels and exposure to the
Linux operating system.
For the quarter ended Jan. 31, Novell reported a loss of $17.9
million, or 5 cents a share, compared with a prior-year profit of
$20.2 million, or 6 cents a share. Excluding the review expenses
and other impacts, earnings were flat at 7 cents. Revenue slid 5.8%
to $190.7 million.
Analysts polled by Thomson Reuters expected a profit of 7 cents
on revenue of $199 million.
Gross margin narrowed to 78.2% from 78.4%.
Maintenance and subscriptions revenue, which makes up the bulk
of the company's total, declined 5.4%. Revenue from software
licenses decreased 3.8%, while services dropped 10%.
Shares closed up 2 cents to $5.82 and were inactive in
after-hours trading.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com