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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: bob cochran who wrote (21340)	3/22/1998 7:30:00 PM
From: Jim McCormack	Read Replies (1) \| Respond to of 42771

Bob - What is your Earnings Projection I hate to be a pain but every Bull in here has no analysis prepared for earnings this quarter and for the full year for that matter. All I hear is how great he products are but no one will go on record for how all the great stuff is going to effect revenues and earnings. I like Novell Products but I think Revenues are shrinking and expenses are constant. The company needs to shrink itself further to remain in the black. Surprise me - please... tell me you have a projection and analysis you can post. I can't get any "Data" by the longs to support the position. What is your projection for next quarter and the year as a whole. Include the impact of Netware 5.0 please if you have it.... Thanks - and welcome to the board.... Jim McCormack What is the PE going to be if the stock gos to 35?

To: bob cochran who wrote (21340)	3/22/1998 9:03:00 PM
From: Jim McCormack	Respond to of 42771

The Facts - Revenue Statistics Bob - did this before I read your post above...I keep a set of numbers handy for Novell and they are a bit ugly. Think we may have to wait a while yet to see Novell emerge from the current situation. Here are some numbers. We got some channel corrections in Q2 96 and Q3 97 so the quarters look bad. Amazing how it happened twice isn't it - That's what the lawsuit is all about.... Revenues are free falling - For 1997 Novell had less then half the amount of sales as it had for 1995. The Netware product line makes up a greater and greater amount of that revenue. The other products groups have declined faster then Netware. The server operating environments product line represented 61% of revenue in fiscal 1997 compared to 55% of revenue in fiscal 1996, and 51% in fiscal 1995. Meanwhile the operating expenses as a percentage fo net sales are increasing - even with the cuts they have made - Sales are declining faster then expenses are being cut. Hardly a positive trend... I see no growth - You see some? Where? Groupwise? Managewise? Tuxedo? SNA Connectivity? (Revenue was down from fiscal 1996 to fiscal 1997 with a 14% decrease in application products as well as a 43% decrease in infrastructure products) The facts show declines in all network services groups but Bordermanager. It went from zero to 5 million - not enough to cover the declines. Kind of makes Eric's move to Network services look like a difficult proposition. This company is far from turning the corner - Sales are still falling... They have to cut more expenses to stay profitable. We all know that investment income saved the day last quarter. Eric now invests the billion in mutual funds to leverage the cash further - This works both ways - so far he is a hero as we cross DOW 9000 but if we "Correct" it could cost Novell dearly. We will know in a couple of months - I would not be long this stock - and I am not. I'll get it for less later if I want any - right now I don't want any and ain't got none. Jim McCormack Revenue Breakdown 95 95 95 96 96 96 96 97 97 97 97 98 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Educ 41 41 ? 41 35 39 36 32 32 20 41 27 UNIX 22 20 ? 31 18 18 12 10 9 8 9 7 Netware 244 295 ? 230 65 216 243 253 169 39 52 151 Net Svs 77 93 ? 93 49 92 94 80 63 24 66 67 Totals 384 449 ? 395 167 365 385 375 273 91 168 252 Year to Year 95 96 97 Edu SVS Other 166 151 125 Unix 75 79 36 Netware (SOS) 1045 754 613 Net Svs 343 328 233 Coral 412 63 - Totals 2041 1375 1007 OPERATING EXPENSES 1997 Change 1996 Change 1995 ------------------ ------- ------ ------- ------ ------- Sales and marketing (millions) $ 444 -14% $519 -10 $ 579 Percentage of net sales 44% 38% 28% Product development (millions) $ 283 3% $276 -25% $ 368 Percentage of net sales 28% 20% 18% General and administrative (millions) $ 148 1% $146 -5% $ 153 Percentage of net sales 15% 11% 7% Restructuring charges (millions) $ 55 206% $ 18 -- -- Percentage of net sales 5% 1% -- Total operating expenses (millions) $ 930 -3% $959 -13% $1,100 Percentage of net sales 92% 70% 54%