Novell Shares Rise 4.1% on Hope for Revenue, Earnings Growth
Provo, Utah, May 13 (Bloomberg) -- Novell Inc. shares rose
4.1 percent on optimism that the company will show modest revenue and earnings growth in the fiscal second
quarter compared with the first, buoyed by slim operating margins.
Shares of the networking software company rose 7/16 to 11 in
trading of 12.7 million, more than double the three-month daily
average. Earlier, they touched 11 1/4, a 52-week high.
Novell has shifted its product strategy and restructured its
operations to cut operating expenses in the last couple of
quarters in an effort to boost sales of its networking software.
Novell is trying to regain market share lost under pressure from
Microsoft Corp.'s Windows NT.
''There's now robust excitement about the company,'' said
Paul Foster, a trader at 1010 Wall Street, a Chicago options-
strategy firm. ''It's a turnaround scenario.''
Analyst Joseph Bellace of Merrill Lynch raised his rating to
''accumulate'' from ''neutral,'' saying management has stabilized
quarterly revenue in the $250 million range. He expects earnings
per share of 20 cents to 25 cents for the 1998 fiscal year, and
35 cents to 40 cents a share for the 1999 fiscal year.
Novell also stands to gain from any delay in Microsoft's
Windows NT 5.0. The Justice Department and more than a dozen
states are preparing to bring a broad antitrust suit against
Microsoft before Friday, when the software giant plans to ship
its Windows 98 operating system to computer makers. Windows 98 includes a number of new features that
analysts say will be
incorporated into the next version of Windows NT.
Novell will report its earnings for the fiscal second
quarter ended in April next Thursday after the close of U.S.
trading.
Analysts expect the company to earn 5 cents a share in the
quarter, the average estimate of eight analysts polled by IBES
International Inc.
--Mylene Mangalindan in the San Francisco newsroom (415) 912-2991 |
