Novell blames revenue fall on Asia

Network vendor announces profits down on last year; but up on last quarter. Dearbail Jordan reports.

Novell's latest financial results revealed a drop in net earnings andarter. Dearbail Jordan reports. revenue, which it blamed on the Asian crisis.

First quarter net profits to 31 January were down 76 per cent at $14 million, from $50.8 million last year. Turnover was also down 33 per cent at $252 million, compared with $375 million from the corresponding quarter last year.

Although the networking company's profits are down on comparative quarters, they are double the $7 million for Q4 last year.

In a statement, Novell connected the drops to 'a weakness in the Asia Pacific region' which contributed nine per cent of Novell's total revenue in the quarter. The results stated that the US has contributed 57 per cent of total revenue with EMEA division responsible for 28 per cent of sales.

Andrew Sadler-Smith, Novell managing director for UK and Ireland, said the decline had occurred in Hong Kong, Taiwan and Japan among others and market revenue has decreased from 13 per cent in the fourth quarter.

'The decline was in distribution box products which includes NetWare,' he said.

He added: 'The revenue is less than we expected but the Pacific Rim impacted.

We did expect the results to be stronger.'

However, the company remained positive about the results, boasting a decrease in its operating expenses following last year's group restructure.

For the quarter, these operating expenses were $192 million, falling 19 per cent from $237 million last year.

Sadler-Smith cited Ireland and Scotland as strong growth areas and said that licensing was being taken up at a faster rate than in the past.