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While revenues were up in its second quarter, Novell Inc. ended up reporting a net loss due to a payment on an investment.
For its second quarter ended April 30, Novell Inc. ended up reporting a net loss of $15.4 million with the charge a preferred stock dividend payment on an IBM investment. Revenues were up 6.5 percent from the previous quarter, the company said.
Still, even with the charge, the result was better than the same quarter last year, when Novell had a net loss $29 million. Had it not been for the dividend payment and a restructuring charge of $5 million Novell would have shown a profit of $14 million, according to generally accepted accounting principles.
At the same time, investors were displeased to see an increase in current accounts receivables; the change shows that customers were not paying Novell off in a timely fashion.
Revenue for its NetWare-related products declined only 2 percent from the year-ago period, less than half the slip suffered then, the company said. According to execs, this trend showed support from customers for Novells new Linux strategy.
Novell last summer changed its business from promoting its NetWare operating system and network applications, such as eDirectory, to becoming a Linux company. First, the Provo, Utah company bought Ximian, the makers of such popular Linux desktop programs as the Ximian Desktop and the Evolution workgroup program for users and Red Carpet for software management. Later, Novell acquired SUSE Linux, one of the worlds leading Linux distributors, for $210 million.
Since then, Novell has made Linux the centerpiece for its business plans. In the next version of its network operating system, Open Enterprise Server platform, Novell will be packaging both NetWare and SUSE Linux.
Meanwhile, Novell is battling The SCO Group Inc. in the courts over which company has the copyrights to Unix. SCO hopes to prove that Unix source code was illegally placed in Linux. Novell maintains that SCO never had the intellectual property rights to Unix to pursue such a claim in the first place.
Despite meeting the expectations of the Thomson First Call analysts poll, Novell shares declined 7.72 percent. The trading volume was over 21 million shares, which is more than triple the stocks usual volume.
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