Novell Posts 3Q Profit As It Cut Costs

WALTHAM, Mass. (AP) — Novell Inc., which sells computer-networking software and technology services, said Thursday it swung to a third-quarter profit from a year earlier as it cut operating expenses by 20 percent.

The results, however, missed Wall Street's expectations.

Novell's net income totaled $16.7 million, or 5 cents per share, in the quarter, compared with a loss of $15.1 million, or 4 cents per share, a year earlier..

On average, analysts polled by Thomson Financial expected a profit of 7 cents per share.

"Operating margin continued to expand year-over-year due to diligent expense management; however, revenue performance was similar to many companies in the software industry," said Ron Hovsepian, president and CEO of Novell.

Operating expenses fell to $147.7 million from $184.6 million, boosting the operating margin to 9.9 percent from 0.4 percent.

Quarterly revenue fell 12 percent to $216.1 million from $245.2 million in the previous year.

Shares of the company lost 4 cents to close at $4.71 Thursday.