Novell Inc.'s first quarter turned out dismal, and the company expects more the same in the coming three months.
Novell's net sales declined about 9 percent. While most of the decline can be attributed to the lame duck business applications group, sales of Novell's networking products also fell.The company said it expects the second quarter to also show declining sales as it reduces product inventory held by distributors by $225 million.
Roxane Googin, an analyst at Gruntal & Co., said Novell's announcement signals that its Net-ware products are "clearly under attack" from Microsoft Corp.'s Windows NT, a networking product making gains with corporate buyers.
Novell reported revenue of $438 million in the quarter ended Jan. 27, 1996, down from $493 million a year ago. Chalk most of that decline to the demise of Novell's business applications group, which includes WordPerfect.
Revenue from those products fell to $42 million, down from $126 million a year ago.
Novell is selling the wayward division to Corel Corp., a Canadian company, for approximately $194 million. Novell trimmed 625 employees during the first quarter as it prepared to cut loose the business applications group.
It racked up $18 million in restructuring charges, mostly in severance costs and by ridding itself of redundant facilities, according to the first-quarter report.The star performers in Novell's lineup was NetWare 4 and GroupWise. NetWare 4 revenue was $131 million, an increase of 80 percent from a year ago. Overall, revenue from NetWare products contributed revenue of $228 million.
But NetWare revenue as a whole declined from last year. In the fourth quarter of 1995, Novell's NetWare products had revenue of $265 million.
GroupWise, an electronic messaging and workgroup application, had revenue of $21 million, up 39 percent from a year ago.
Novell said it took several companywide measures to cut costs, managing to reduce operating costs by $40 million.