Novell postpones today's earnings release

This is never a good thing.

While presenting the move as merely "an abundance of caution," Novell announced this morning that it is postponing its fourth-quarter earnings release and conference call that had been scheduled for today.

It seems that Novell and federal regulators have been going back and forth for four months now over some unspecified issues.

From the press release:

Novell received a comment letter from the Securities and Exchange Commission (“SEC”), dated Aug. 7, 2007, regarding Novell’s Form 10-K for the fiscal year ended Oct. 31, 2006, and its Form 10-Q for the quarterly period ended April 30, 2007. Novell delivered a response letter to the SEC on Sept. 20, 2007. On Oct. 18, 2007, Novell received a second comment letter from the SEC indicating that the SEC had reviewed Novell’s response to the Aug. 7, 2007 letter. The second comment letter was limited to certain accounting matters. Novell responded to the SEC’s second comment letter on Nov. 7, 2007 and is awaiting a response.

"We are confident of our accounting and are working diligently with the SEC to respond to their inquiries," said Dana C. Russell, chief financial officer of Novell. "In an abundance of caution, we have chosen to postpone our earnings release. We look forward to completing our dialogue with the SEC."

That last part is no doubt true.

In late August, Novell reported what could charitably be called encouraging financial news in that it's third-quarter loss of $3.4 million was only about half of the loss for the same quarter in 2006. Revenue was also up a bit to $243 million from $234 million.

Bottom line through three quarters: Novell was $25.5 million in the red.

“We're cautiously optimistic about the results here,” Russell said at the time.

The company could provide no estimate as to when it expects the SEC issues to be resolved, although it said it expects to meet a Dec. 31 deadline for filing a Form 10-K for the fiscal year ended Oct. 31.

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Copyright © 2007 IDG Communications, Inc.

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