Novell still plagued by poor software sales in Q3

Novell has announced third-quarter fiscal 2000 results indicating the software vendor still has problems with the sales side of its global operations as it struggles to restructure its business.

For the period ended July 31, the company yesterday reported net income of $US8.6 million and earnings per share of 3 cents on net revenue of $270 million. The figures compare poorly with the year-ago quarter when Novell recorded net income of $49.3 million and earnings per share of 14 cents on net revenue of $327 million.

Six analysts polled by First Call/Thomson Financial predicted that Novell's third-quarter mean earnings per share would be 2 cents. The company beat the analyst estimates by a penny.

"Although we met our total revenue and earnings objectives for the third quarter, we are nonetheless disappointed by continued weakness of packaged software sales globally, and especially our poor performance in Europe," Novell Chairman and Chief Executive Officer Eric Schmidt said in a conference call Wednesday.

Schmidt characterised the company coming to grips with the problems in its sales operations as being "a costly unintended learning experience," adding that Novell has previously "screwed up" its channel, creating unintentional conflict between its direct and indirect channels.

The software vendor still believes it will take until early next year to sort out the problems in its business, according to Schmidt, with the company midway through such restructuring. In the fourth quarter, Novell will take additional action to ensure its expenses are in line with revenue, he added.

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