Linux sales boost Novell results

Novell has posted positive overall results for its third fiscal quarter of 2008, pointing to growing Linux sales and raised year-end operating margin forecasts.

The company reported net revenue of $245 million (£134 million), up $9 million (£4.9 million) compared to the same quarter in 2007, which has helped it – unlike Dell earlier today – escape the effects of the global economic slowdown.

Operating income for the third fiscal quarter 2008 was $1 million (£546,000), compared to a loss from operations of $10 million (£5.5 million) for the third quarter of last year.

It posted a 30 per cent increase year-on-year in sales of its Linux platform products, totalling $31 million (£17 million) of the $33 million of product revenue from the Open Platform Solutions suite it is sold from.

Revenue from Novell’s identity and security management products was $37 million, of which ID and access management made $34 million (£18.6 million), up 22 per cent year-on-year.

Likewise, revenue from its systems and resource management product group was $47 million ((£25.6 million), up 25 per cent. And its workgroup product revenue was the only portfolio area that declined, one per cent year-on-year, to $92 million (£50.2 million).

“We had another quarter of strong product revenue growth and expanding operating margins,” said Ron Hovsepian, Novell president and chief executive. “Our transformation of the company positions us well to focus on sustained growth in 2009.”

But it was not all good news, as third-quarter net losses increased to $15.1 million (£8.2 million) as a result of charges related to its auction-rate securities. This is compared with a loss of $3.7 million (£2 million) a year ago.

Despite this, the software maker still expects 2008 revenue to be in the region of $940 million (£513 million) and $970 million (£530 million). This would be in line with market expectations of $959 million (£524 million).

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