Novell Reports 12 Percent Sales Drop In Q4

"I feel very good about how we've executed in a very tough year," he said in a conference call with financial analysts.

For the fourth quarter ended Oct. 31 Novell reported total revenue of $215.6 million, down 12 percent from the $244.7 million the company reported for the same period last year. The company reported a net loss of $256.7 million for the quarter compared to a net loss of $16.3 million in the same period one year ago. The bottom line included a $279 million charge to goodwill and intangible assets.

Sales of software licenses dropped almost 39 percent to $31.4 million from $51.4 million one year ago. Revenue from services in the quarter dropped 28 percent to $24.4 million from $33.7 million last year, while revenue from maintenance and subscriptions was virtually flat at $159.9 million.

Despite the big loss on the bottom line, Hovsepian argued that Novell is strongly positioned for the new fiscal year. "We've worked hard in 2009 to improve our operating margins, deliver innovative products and expand our partner ecosystem," he said.

The CEO said the company has improved its operating margins by controlling costs, and strengthened its product lineup by introducing its Novell Cloud Security Service and the SUSE Appliance Program.

The company also expanded its "global and regional partner ecosystems," Hovsepian said, including launching earlier in the year a revamped channel partner program "which has been well received." He said partner recruitment, training and deal registrations have all been on the rise.

For all of fiscal 2009 Novell reported total revenue of $862.2 million, down almost 10 percent from revenue of $956.5 million in fiscal 2008. For fiscal 2009 the company reported a net loss of $212.7 million, including the fourth-quarter charge, compared to a loss of $8.7 million in fiscal 2008.

For the year, revenue from sales of software licenses plunged 38 percent to $166.9 million in fiscal 2009 from $189.0 million in fiscal 2008. Revenue from services for all of fiscal 2009 decreased 31 percent to $104.5 million from $151.0 million in fiscal 2008, while maintenance and subscriptions revenue increased almost 4 percent to $640.7 million in fiscal 2009 from $616.5 million in fiscal 2008.

Novell forecasted that sales in the first fiscal quarter of 2010 would be between $200 million and $210 million.