Novell has predicted that the IT market will show no short-term
signs of recovery as it overcame disappointing sales figures to
report better-than-expected third-quarter earnings.
Returning a four cents-per-share dividend, the company reported net
earnings of $13m, excluding non-recurring items, for the quarter to
31 July.
Jack Messman, the president and chief executive officer of Novell,
said that while e-business solutions promised a high return on
investment, it was apparent that it would take until the second
half of 2002 before improving conditions would open up the
market.
Novell reported a net-income loss of $19m for the quarter, compared
to a net profit of $8.5m for the corresponding period last year.
The company blamed the absorption of an extraordinary one-time
restructuring cost of $39m during the quarter for the loss.
Net sales suffered from an 8% reduction to $247m, in spite of an
$80m revenue fillip resulting from the company's acquisition of the
IT consulting company Cambridge Technology in March.
Sales from Novell's large network site-licence business - which
accounted for 68% of its total revenue - were $167m in the third
quarter, a reduction of 3% compared to the previous quarter. Sales
of the company's packaged software licences for smaller networks
fell 9% to $33m.
A spokesman for Novell said the company expected to break even in
the fourth quarter, with forecasted revenue of between $30m and
$315m, although it warned that these figures could be revised as a
result of further restructuring and integration costs.