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August 21, 1997updated 03 Sep 2016 12:41pm

NOVELL TAKES Q3 LOSS OF $227.8M ON $90.1M REVENUES

By CBR Staff Writer

Since taking over at Novell Inc, CEO Eric Schmidt has not shied away from taking some tough decisions on ugly numbers. The company has long been preparing for a third quarter operating loss and yesterday it did exactly that and then some. The Provo, Utah company reported a third-quarter net loss of $121.7m down from a profit for the same period last year of $58.8m on revenues of just $90.1m down from $365.1m last year. The quarter includes a restructuring charge of $55m and the poor revenues reflect Schmidt’s attempt to clear excess product inventory from the indirect channel. The slim revenues it did manage to draw came primarily from sales through its major accounts, corporate and volume license programs, the company says. According to Novell CEO Eric Schmidt said that these actions during the quarter meant that comparisons with the company’s previous quarters were not indicative of Novell’s market strength and opportunities. Even with the restructuring cost excluded the company still exceeded First Call analysts worst expectations for a net income loss $0.11 per share by $0.14. Novell reported a total net loss per share of $0.35 only $0.10 per share of which it attributed to restructuring costs. During the quarter the company says its cut its workforce by 1,000. Earlier in the year, Schmidt decided to take all the cost of restructuring the ailing company he inherited as quickly as possible, hitting the company’s second and third quarters dramatically. In the second-quarter, the company reported a net loss of $21.6m with revenues down 27% and more than $100m from previous quarter, to $273.1m. Schmidt says the company is now focussing on making a Novell a pure internet and intranet software leader by summer 1998 At the nine month mark, Novell reported losses of $85.47bn on revenues of $738.0m.

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