Novell in profit shock

Novell has announced first-quarter profits of $8.3m (£5.9m) on turnover of $271m (£192m).

Novell has announced first-quarter profits of $8.3m (£5.9m) on turnover of $271m (£192m).

The company had revenue of $245m (£172m) in the same quarter a year ago and a net loss of $7.7m (£5.41m).

Jack Messman, Novell's chairman, president and chief executive, said the current results point to "incremental" progress for the company. But the sluggish economy is likely to continue to affect the software vendor through the second quarter.

"The integration of Cambridge Technology Partners within Novell is almost complete. We are controlling costs in the face of a restrained IT marketplace, and taking steps intended to strengthen our software business with associated solutions offerings," said Messman.

"Cost-cutting actions we took last fall enabled us to lower costs from the prior period by $40m," he said, referring to cutbacks that included laying off 1,400 staff. "We've begun to achieve our near-term objective of improved profitability as we address the longer-term issue of returning Novell to sustainable growth overall."

The results came during a week of management shake-ups and changes for the company.

Earlier this week, Novell announced that its chief operating officer, Stewart Nelson, would leave the company next month, while Christopher Stone is returning to the company in the newly created position of vice chairman, office of the chief executive.

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