Nine-figure charge hits Novell's bottom line

Software vendor takes $279m hit in Q4 as revenue falls at all product groups except Linux

Novell's workgroup product revenue fell 15 per cent in Q4

Novell has swung to a $206m (£124m) loss for its fiscal 2009 after taking a whopping $279m impairment hit in its final quarter.

The software vendor saw revenue fall frustratingly short of the magic $1bn mark yet again for its year to 31 October. It dropped from $957m to $862m on an annual comparison.

In the fourth quarter, Novell reported a GAAP loss from operations of $259m, which included a $279m non-cash impairment charge to goodwill and intangible assets. Revenue for the quarter fell from $245m to $216m.

Much of the drop was attributable to a fall in workgroup product revenue, which was down 15 per cent to $78m on an annual comparison.

In contrast, Linux Platform Products sales grew 14 per cent to $39m compared with the same period last year. Product revenue from identity, access and compliance management fell 14 per cent to $30m, while product revenue from systems and resource management declined 10 per cent to $40m.

Without the one-off impairment charge, profits hit $38m and Novell chief executive Ron Hovsepian remained upbeat.

He said: “While it was a challenging year in terms of revenue, we worked hard to improve our cost structure, deliver innovative solutions, and expand our partner ecosystem while delivering a significant improvement in non-GAAP operating margin, which increased to 16 per cent from 10 per cent last year.”