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: Wallace Rivers who wrote (27797)	8/19/1999 8:52:00 PM
From: Paul Fiondella	Read Replies (2) of 42771

Earnings were better than reported !!! The $.14 reported reflects a change in Novells lowering of the inventory of product in the channel from 49 days in Q2 to 36 days in Q3. They are moving down channel inventories. This is the reverse of channel stuffing. The CFO estimated that this lowering of inventories vs had it been maintained at 49 days would have resulted in $10 million in additional revenue. That translates into $.03 a share. So this was really a $.17 a share quarter under Q2 levels of inventory. This biting of the bullet on channel inventories by Novell indicates some confidence going forward in revenues. They have a 30 day goal so little further impact is assumed. Secondly the losses from the sale of SCO and Corel stock are coming to an end. I believe these losses were 9 million this quarter. Both Single Sign-on and caching appliance revenues will appear in Q4. =============== In light of the above this is a pretty good quarter. Their decisions appear to have been to lower the earnings numbers in this quarter rather than let the number blow out of proportion.

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