Although the crash of two subsidiaries of Novell's European distributor CHS adversely affected the networking giant's fourth quarter results, it still managed to meet analysts' expectations.
Novell's revenues in Europe, the Middle East and Africa were hit by $3 million and expenses increased by $1 million during the quarter, which ended 31 October, as a result of CHS' German and UK subsidiaries going into receivership last October.
Despite this, strong European sales elsewhere helped the company end its financial year on a high note as it started fiscal 2000 with a heavy focus on pushing its directory offerings.
Revenues from Europe, the Middle East and Africa grew 29 per cent to $104 million, led by Germany, the UK, Scandinavia, the Netherlands, France and Poland. US turnover, grew seven per cent, however, to $191 million.
Total revenues for the period increased 16 per cent to $345 million, while net income grew 76 per cent to $74 million. The figures were boosted by a tax settlement of $15.2 million, which increased earnings per share by $0.04 to $0.21 compared with $0.12 a year ago. Excluding the tax settlement figure, Novell matched the First Call analysts' consensus estimate of $0.17 earnings per share.
Eric Schmidt, Novell's chairman and chief executive, said: "Novell accomplished what we said we would do. We more than doubled our growth rates around the directory products...we saw stellar performance from the Netware 5 server platform and new directory applications such as Zenworks."
The next 12 months may be tougher for the company, however, which is bracing itself for the launch of Microsoft's Active Directory. This is due to be released as part of the Windows 2000 operating system in February.
Novell has been busy promoting its Novell Directory Services (NDS) to the developer community and at Comdex last week announced an aggressive pricing campaign to woo software partners. This included free directory licences and upgrades.
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