Novell Slides on Outlook

Updated from May 31

Novell(NOVL Quote) share slumped Thursday after the company's third-quarter outlook failed to inspire, prompting one brokerage's downgrade. The stock was recently off 97 cents, or 12.6%, to $6.76 in early Thursday trading.

The company said Wednesday that it made a profit of $3.34 million, or 1 cent a share, compared with a loss of $15.6 million, or 4 cents a share last year. Total revenue slipped to $287 million from $297 million, while maintenance and services revenue dropped to $238 million from $251 million.

Excluding various items, the company earned a profit of $10.5 million, or 3 cents a share. Analysts polled by Thomson First Call were looking for a profit of 3 cents a share on sales of $278 million.

Excluding Celerant, which Novell sold in late May, the company expects a second-quarter profit of 3 cents a share, excluding an estimated 3-cent charge for stock-based compensation. Sales will likely range from $239 million to $247 million.

Wall Street was forecasting a 4-cent-a-share profit on sales of $283 million, but it wasn't immediately clear if First Call's consensus estimate excluded the Celerant sale.

Early Thursday, Credit Suisse downgraded its rating on the stock to neutral from outperform.