Novell stock up on layoff rumors

Amid swirling rumors of domestic layoffs, Novell's stock closes slightly up as it prepares to announce quarterly results.

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Shares of Novell (NOVL) were up slightly today, as the company prepared to report its second-quarter results--including expected layoffs--tomorrow.

Novell shares closed at 8-1/16 today, up 7/32 from Friday's close.

Novell's second-quarter results are expected to come in below analysts' initial estimates, with company officials pointing to slow growth in small-business sales as a prime factor.

Because of the lackluster financial performance, rumors abound that new CEO Eric Schmidt will slash the company's domestic workforce on the heels of a 15 percent layoff in Europe.

A Novell spokesman declined to confirm any domestic layoff plans. "We are in the process of a thorough assessment of our business, including our worldwide workforce," he said. "One of the first things Eric has done is order a complete review of the business, and every area of the company is being looked at and evaluated."

A consensus estimate from investment researcher First Call places Novell's per-share earnings for the quarter at 3 cents, up from a loss of 19 cents per share for the year-ago quarter but well below initially predicted earnings of 17 cents per share.

Plans to open a new San Jose, California, campus for the 1,000 employees based in that area will continue, according to the spokesman. Construction on the site is scheduled to begin later this year.

Small businesses were once a cornerstone of Novell's business, but the arrival of Microsoft Windows NT has cut Novell's share of that market. Novell is currently undergoing an evolution, embracing Internet standards and attempting to become a one-stop shop for customers looking for networking infrastructure software.