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Novell shares are up 20% amid investors’ optimism

But some warn the firm still suffering from sales woes

SHARE Novell shares are up 20% amid investors’ optimism

PROVO — Novell Inc. shares rose more than 20 percent on Monday on expectations that the software maker's third-quarter results, slated for release Wednesday, will beat Wall Street estimates.

While Olde Discount Corp. analyst Steve Shepich attributed the gain to investors' optimism, he cautioned against getting "excited," saying the company is still facing some of the sales execution problems that hurt its second-quarter results, he said.

Shepich, who has a neutral rating on the stock, also anticipates that the imminent release of Microsoft Corp.'s Window 2000 will hurt Novell.

On May 23, Novell executives warned shareholders of continued sluggish sales. They said third-quarter revenue would roughly equal the second-quarter's $302.3 million, which even with a one-time royalty of $35 million had fallen 4 percent from the year-earlier period.

However, some market watchers visiting an Internet message board said Monday they expect Novell to post third-quarter earnings of at least 5 cents a share, 3 cents more than First Call/Thomson Financial's consensus view.

At the same time, Wall Street watchers downplayed a Monday announcement that Computer Sciences Corp. has joined Novell's Consultant & Systems Integrator Alliance program.

A Novell spokesman declined comment, saying the company doesn't comment on its stock activity.