Dow Jones Business News -- May 29, 1996
Novell Inc. 2Q Loss 15c A Share Vs Net 26c
Dow Jones News Services
Novell Inc.
Quar April 27:
1996 1995
Sales a $188,180,000 $529,508,000
Net income b (55,359,000) 95,868,000
Avg shrs 362,442,000 374,383,000
Shr earns
Net income b (.15) .26
Figures in parentheses are losses.
a. During the second fiscal quarter of 1996, Novell reduced worldwide channel inventories by an
estimated $225 million. This company-instituted reduction in shipments decreased revenue in the
quarter by a comparable amount.
b. Includes gain of $20 million, or four cents a share, from the sale of the company's personal
productivity applications and UnixWare product lines.
Novell Inc.
6 Months April 27:
1996 1995
Sales a $626,099,000 $1,022,733,000
Net income b 8,202,000 177,387,000
Avg shrs 367,013,000 373,205,000
Shr earns
Net income b .02 .48
a. During the second fiscal quarter of 1996, Novell reduced worldwide channel inventories by an
estimated $225 million. This company-instituted reduction in shipments decreased revenue in the
quarter by a comparable amount.
b. Includes gain of $20 million, or 4 cents a share, from the sale of the company's personal
productivity applications and UnixWare product lines.
Novell Inc. (NOVL) reduced worldwide channel inventories by about $225 million in the latest second
quarter as part of the company's plan to change its long-standing distribution stocking policy.
Second-quarter revenue of $188 million included those parts of Novell's business not affected by the
channel stocking change. These were corporate and channel licenses; OEM programs; sales by Novell
KK; and education and service. Revenue from license and OEM programs rose 41% in the latest
second quarter from a year-ago to $107 million.
Novell's sale of its personal productivity applications to Corel Corp. (COSFF) enabled the company
to further lower operating expenses during the second quarter. Operating expenses declined 16% from
the year-earlier period. Novell has reduced employment by 1,900 employees since October due to the
product line sales, bringing total headcount to less than 5,900 worldwide.
Copyright © 1996 Dow Jones & Company, Inc. All Rights Reserved.
The Wall Street Journal Interactive Edition -- May 29, 1996
Novell Posts 2nd-Quarter Loss
On Shift to New Sales Method
An INTERACTIVE EDITION News Roundup
Novell Inc., battling Microsoft Corp. for dominance in the networking
software business, reported a loss for its fiscal second quarter as it shifted to
a new method of sales.
Novell's new approach to selling its products revolves around a heavy
emphasis on licensing software rather than shipping out huge numbers of
individually-packaged products to distributors, who then sold them to
customers. Under the new licensing approach, Novell will deliver much of
its software by computer disk. A customer, for instance, can enter a
licensing agreement and receive a single disk, called a "golden disk," that
can be loaded into many computers swiftly over a network. Novell is paid a
fee for each copy of the software the customer licenses.
The company has predicted that the new approach will sharply cut costs by
reducing inventory, cutting packaging and production expenses and
otherwise trimming overhead.
But the shift is expensive. In the fiscal second quarter ended April 27,
Novell reduced "world-wide channel inventories" by $225 million, which
translated into total sales of $188.2 million, a 65% decline from year-earlier
sales of $529.5 million.
For the quarter, the company posted a loss of $55.4 million, or 15 cents a
share, compared with a profit of $95.9 million, or 26 cents a share, a year
earlier. Results for the latest quarter include a gain of $20 million, or four
cents a share, from the sale of certain businesses.
Although Novell had warned in February that it would cut some $225
million off second-quarter revenue, it didn't forecast how big the loss might
be. The company has said it expects revenue to recover quickly after the
second-quarter hit.
Novell said that the sale of businesses allowed it to further lower operating
expenses, which declined 16% from the year-ago period. Novell has
reduced employment by 1,900 employees since October due to the product
line sales, bringing its total work force to less than 5,900 world-wide.
******* Someone let me know if I have broken some copyright law by posting the above news.
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