Novell financials beats estimates again

Novell Thursday reported net income of $5.8 million for its fiscal 2008 second quarter pulling earnings up from a loss of $2.8 million in the same quarter last year.

The company said it showed healthy growth in its core business units around the Linux operating system, identity/access management software and systems management tools.

"Our business continues to gain momentum and is tracking according to plan," Ron Hovsepian, Novell's CEO said during an afternoon earnings call with financial analysts and media.

Novell, however, reported flat net revenue of $236 million, which was just shy of 2% growth when compared with the $232 million in net revenue from the second quarter of 2007.

For the fifth quarter in a row, Novell's revenue numbers exceeded analyst estimates. First Call/Thompson Financial had expected $233.5 million.

Novell also offered projections for its full year net revenue of $940 million to $970 million. First Call/Thompson Financial estimates Novell will earn $956 million in fiscal 2008, which ends Oct. 31.

Hovsepian said the most exciting development during the quarter for the Linux business unit was a partnership with SAP, which will deliver its all-inclusive platform for small and midsize businesses exclusively on SUSE Linux.

He also said Novell has invoiced $157 million or 65% of the five-year $240 million technology partnership agreement it signed with Microsoft in late 2006.

For the second fiscal quarter, Novell said product revenue from its open platform solutions group, which includes the SUSE Linux desktop and server, was $30 million. All but $1 million of that figure was from Linux platform products, which represented a 31% increase from the same quarter a year ago.

Revenue in the identity and security management group was $31 million, a 13% increase over fiscal second quarter 2007, and systems and resource management revenue was $41 million, a 15% year-over-year increase.

Novell did see a 1% drop in its workgroup product revenue, which includes its GroupWise platform, to $92 million.