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Novell meets 4Q estimates

Novell (Nasdaq: NOVL) met consensus analyst estimates in the fourth quarter.

After market close Tuesday, the vendor of network software and services reported breakeven results on a per share basis for the fiscal fourth quarter, excluding one-time charges. That was in line with the forecast produced by First Call's survey of four analysts for the quarter ended Oct. 31.

Shares of Novell fell to 6.75 in afterhours activity on the Island electronic communications network, immediately following the release of fourth quarter results. Novell slid 0.09375 to 7.4375 in Tuesday's regular session, prior to the quarterly report.

Novell is trading at a 52-week low. The stock has never recovered since plunging in May, following a profit warning.

Don't look for an immediate improvement in the first quarter. The fiscal first quarter historically is Novell's weakest, and that trend is expected to continue, the company said. Expenses in the first quarter and full fiscal 2001 will be higher than originally expected because the company wants to speed up the deployment of Content Exchange services, Novell said.

"We expect overall Novell revenue performance to continue to be soft until we gain the combined benefit of new eBusiness deployments and complete a shift in channel programs to include a new group of partners from the ranks of consulting systems integrators and other service providers," CFO Dennis Raney said.

First Call consensus currently predicts a profit of 7 cents per share for Novell's fiscal first quarter.

Including $47.9 million in previously-announced restructuring costs, Novell in the fourth quarter lost $35 million, or 11 cents per share.

Fourth quarter revenue fell 20.7 percent year-over-year and rose 1 percent sequentially to $273.3 million. Executives blamed the year-over-year drop on the ongoing decline in Novell's packaged software sales, as well as weakness in Europe, where the company's revenue retreated 33 percent from the year-ago period.

Other technology companies, including Dell (Nasdaq: DELL) and Intel (Nasdaq: INTC), have seen softness in the European corporate PC market.

Net services revenue increased 15 percent from the third quarter to $90 million. Server directory revenue fell 7 percent over the same period to $112 million. Service, education and consulting was flat at $55 million.

For the full fiscal 2000, Novell earned $49 million, or 15 cents per share, on revenue of $1.16 billion.

Tuesday's announcement marks the end of a disappointing year for Novell, as the company saw its core software business stagnate. "Growth in new Net services did not accelerate fast enough to offset this decline," said Eric Schmidt, chairman and CEO. "In 2001, our aim is to improve Novell's overall business performance around growth in new Net services."

Novell ended the fourth quarter with $203 million in deferred revenue, the company's highest level ever, Raney said.

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