DOW JONES NEWSWIRES Novell Inc.'s (NOVL) fiscal third-quarter profit dropped 5.9% on lower revenue and margins as results were hurt by customer uncertainty about the software company's future. In March, Novell essentially put itself up for sale after rejecting an unsolicited bid by hedge fund Elliot Associates LP to buy the company for about $1.8 billion, a price Novell said was too low. As of Thursday's close, Novell's market capitalization was about $2 billion. Earlier this month, Novell said it remained focused on growing its business, although the company trimmed its revenue guidance for the quarter, citing customer uncertainty. Like many of its peers, Novell, which works with open-source and proprietary software, is trying to control costs as revenue falls. For the quarter ended July 31, Novell posted a profit of $15.7 million, or 4 cents a share, down from $16.7 million, or 5 cents a share, in the same period a year earlier. Excluding write-downs and other impacts, earnings fell to 6 cents per share from 7 cents per share, below analysts' average estimate of 7 cents per share. Revenue declined 7.9% to $199 million, the high end of the company's lowered August projection. Gross margin narrowed to 78.1% from 78.3% while operating expenses fell 9%. Maintenance and subscriptions revenue, which makes up the bulk of the company's total, slid 6.9%. Revenue from software licenses was down 7.6%, while services revenue decreased 15%. Shares fell 0.4% to $5.62 in after-hours trading. The stock is up 36% this year as of Thursday's close. -By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com
