Novell's Linux Income Increases

After an unexpected delay of eight days, Novell finally announced its financial results for its fourth fiscal quarter and 2007 fiscal year, which ended Oct. 31, 2007. Novell reported net revenue for the overall year of $932 million, a loss of $26 million or 8 cents per share, although the company also reported 69 percent growth in its core Linux products.

The delay in Novell's results was caused by an SEC (Security and Exchange Commission) investigation into the company's financial statements. After completing the investigation, the SEC did not require Novell to make any changes to those statements, allowing the company to release its delayed financial results.

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While Novell's net income went up from 2006's $919 million to $932 million in 2007, the Linux distributor showed a net loss of $26 million. The key reason appears to be that Novell is still restructuring from being a direct sales software and services company to being one that focuses on software and channel sales.

In addition, Novell is getting rid of all of its consulting business units. In this last quarter, Novell has agreed to sell its consulting unit in Switzerland. Once this deal is done, Novell will be entirely out of the this business.

Novell CEO Ron Hovsepian explained, during the Novell earning teleconference, that Novell was making this move because "We're shifting our revenue mix." Hovsepian went on, "One year ago we were a generalist, now we're focusing on becoming a software company."

Read the full story on Linux-Watch.com: Novell's Linux Income Increases, Looks to Channel for Growth in '08