Novell reported earnings of $74 million, or 21 cents per share--a 76 percent increase compared to the $42 million of the same period a year ago. Revenue for the quarter was $345 million.
But taking into account the resolution of an outstanding Internal Revenue Service tax issue that boosted the company's profit per share by 4 cents, Novell reported earnings that were in line with analyst estimates of 17 cents per share for the quarter, according to First Call.
The tax issue resolution relates to the company's 1994 through 1997 tax years.
Novell continued to see adoption of its latest version of NetWare--its core operating system product--drive its business. Versions of the operating system that include directory software technology called NDS were up 17 percent for the quarter and accounted for $176 million.
Novell, under the guidance of chief executive Eric Schmidt, has attempted to expand its strategy beyond NetWare, pushing NDS as a technology base that third-party developers can write programs to. Novell's NDS essentially serves as a yellow pages for anything attached to a network, including devices, computers and software.
The company has also developed several software programs that take advantage of NDS in order to spur interest in the technology.
For the year, Novell reported an 87 percent increase over the previous year in net income to $191million, or 55 cents per share. Income for its previous fiscal year was $102 million, or 29 cents per share.
Revenue for the company's fiscal 1999 was $1.273 billion.
"Our strategy continues to work and the opportunities before us appear to be better and even more exciting going forward," said a confident Schmidt on a conference call with analysts.
Added Dennis Raney, the company's chief financial officer: "Novell is a much stronger company than it was 12 months ago," he said. "12 months from now, we again expect to be able to report that our business is even stronger."
Novell also garnered more than $38 million in revenue from its caching software, which third-party systems providers such as Dell Computer and Compaq Computer are bundling with Intel-based hardware. Other quarterly bright spots include NDS-enabled application software, which accounted for $90 million in revenue for the quarter.
Sales of older software products that do not include NDS declined 32 percent to $29 million.
Novell reported cash and short-term investments of $895 million. During the quarter, the company spent $199 million to repurchase 9.3 million shares of Novell. For the fiscal year, Novell spent $403 million on the repurchasing of 23 million of the company's shares.
Novell has seen high-level marketing executives leave the company in recent months. Schmidt addressed the issue, saying the company's marketing operation has struggled with the question of, "Where should the emphasis be?"
"Not everyone was in agreement," Schmidt said.
Now Novell has brought its marketing and sales organizations together and aligned them with the company's business objectives, according to Raney. Novell recently promoted Steve Adams to vice president of global marketing and installed DaveShirk as vice president of product marketing.
"We made a series of adjustments," Schmidt said. "We are now done with those issues."