Novell Inc. Reports Operating Results (10-Q)
Novell Inc. has a market cap of $2.06 billion; its shares were traded at around $5.83 with a P/E ratio of 26.5 and P/S ratio of 2.53.
Highlight of Business Operations: During the first quarter of fiscal 2011, total revenue from our Security, Management and Operating Platforms business unit segment (SMOP) decreased $4.3 million, or 3%, compared to the prior year period. During the first quarter of fiscal 2011, total revenue from our Collaboration Solutions business unit segment (CS) decreased $7.4 million, or 9%, compared to the prior year period.
Operating margin for the first quarter of fiscal 2011 was 6%, compared to 11% for the prior year period. The negative impact to operating margin of the additional expenses related to Company Developments in the first quarter of fiscal 2011 was 5%. By comparison, the first quarter of fiscal 2010 included a $4.6 million change in accounting estimate related to fiscal 2009 sales compensation expense that increased operating margin in the quarter by 2%. Foreign currency exchange rate fluctuations, as measured by using the prior year period foreign currency exchange rates on non-U.S. dollar denominated revenue and expenses, favorably impacted income from operations by $0.4 million, or 4%, in the first quarter of fiscal 2011 compared to the prior year period.
Revenue in our maintenance and subscriptions category decreased during the first quarter of fiscal 2011 compared to the prior year period as maintenance and subscriptions revenue declined by $1.9 million, or 2%, in SMOP and $6.7 million, or 10%, in CS. The SMOP decrease resulted primarily from lower Systems and Resource Management products maintenance revenue. The decrease in CS maintenance and subscriptions revenue resulted primarily from continued weakness in sales of our legacy products and from, we believe, the uncertainty associated with Company Developments.
We had total deferred revenue of $592.8 million as of January 31, 2011 compared to $645.9 million and $651.0 million at January 31, 2010 and October 31, 2010, respectively. Deferred revenue represents revenue that is expected to be recognized in future periods primarily under maintenance contracts and subscriptions that are recognized ratably over the related contract periods, typically one to three years. Deferred revenue related to our agreements with Microsoft is recognized ratably over various related service periods, which can extend up to five years. The decrease in total deferred revenue of $58.2 million in the first quarter of fiscal 2011 compared to October 31, 2010, reflects seasonably lower invoicing, the negative impacts to invoicing from, we believe, the uncertainty associated with Company Developments and the recognition of $16.1 million of deferred revenue related to our agreement with Microsoft.
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