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Novell sales up 20 percent for quarter

The network software firm beats Wall Street estimates by a cent for its fiscal second quarter.

Network software provider Novell beat estimates by a cent for its fiscal 1999 second quarter on strong sales of its latest release of the NetWare operating system.

Novell reported income of $39 million, or 11 cents per share, on revenue of $316 million. The gains represent a 20 percent increase over the same period in the previous year, when the company reported income of $19 million, or 5 cents per share, on revenue of $262 million.

The company continues to Novell stock chart reinvent itself under the guidance of chief executive Eric Schmidt. Novell has altered its strategy to focus on optimized software for specific tasks and providing network infrastructure tools such as its Novell Directory Services, or NDS.

"Novell is on its way to becoming a growth company again," Schmidt said in a statement. "We had planned for growth, but the market's response to NetWare 5 has exceeded our plans."

Analysts' consensus estimates pegged Novell's earnings at 10 cents per share, according to First Call.

The company said site licenses from medium- and large-sized organizations for software that supports NDS were up 61 percent year-over-year to $181 million in revenue.

Novell reported cash and short-term investments of $974 million at the end of the quarter. During the period, the company spent $69 million to repurchase shares as part of last year's buyback plan, aimed to repurchase 10 percent of the company's outstanding stock, or 35 million shares.

Separately, Novell Ventures--a technology fund developed by the software maker--announced an undisclosed investment in Food.com, a Web site that allows users to order take-out food from participating restaurants over the Net.