Novell share price tumbles 15%

NEW YORK — Novell Inc. stock plunged Thursday after the networking-software maker said second-quarter revenue from Linux products had slipped from the previous quarter.

Novell shares dropped $1.13, or 15 percent, to close at $6.60 Thursday on the Nasdaq Stock Market.

The amount of the revenue decline was not specified in a conference call held Wednesday after financial markets closed.

"We're signing a lot of longer-term contracts where the revenue recognition gets pushed out," Chairman and Chief Executive Jack Messman said.

Novell's flagship NetWare network server operating system links desktop computers to corporate networks. It also provides a version of the Linux operating system and applications.

Pacific Crest Securities analyst Brendan Barnicle said the company is taking too long in transitioning over to Linux products from its more traditional businesses.

For the second quarter ended April 30, the Waltham, Mass., company reported earnings of $3.3 million, or 1 cent a share, up from a loss of $15.6 million, or 4 cents a share, a year before.

Excluding items, earnings were 3 cents a share, up from a penny a share a year earlier.

Analysts surveyed by Thomson Financial expected the company to post earnings of 3 cents a share, on average.

Officials at Novell were not immediately available for further comment beyond Wednesday's earnings conference call.

About one-third of the company's 5,200-person work force is in Provo.

Citigroup analyst Brent Thill said in a note that Novell is "the No. 2 vendor in the high-growth Linux operating system market but has failed to capitalize on the market growth as it seeks to balance investments with serving its legacy installed base."