Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Loring who wrote (25574)	2/24/1999 10:21:00 AM
From: Paul Fiondella	Read Replies (1) of 42771

I think you should read my posts more carefully I don't roll the dice, but I also have no inside information. My assessment of Novell's earnings report is as follows: The contribution of Netware 5.0 in the previous quarter was 90 million. That quarter saw .11. The assumption of the analysts is a decline quarter to quarter in revenue and earnings. Yet the last time Novell introduced a major NOS upgrade its revenues increased quarter to quarter. We were later told that this was due to channel stuffing. It only takes $3.5 million to produce a penny in earnings. If the acceptance of Netware 5.0 is as great as everyone makes it out to be then I expect that $90 million to go up substantially in this quarter. These are enterprise sales not VAR sales. Assuming a 70% profit margin on sales you would only need an increase to $120 million to produce .12 a share. With expectations so low, there is no reason why the company cannot produce much better than expected earnings. Has anybody heard of Schmidt talking down the quarter to analysts? I heard his CFO talking up revenue growth.

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