• CEO Messman Postpones Gupta Appointment
• David Litwack Threatens to Walk

Novell earned a narrow $13 million, or three cents a share, on revenues of $301 million in its fiscal fourth quarter ended October 31 compared to last year when it lost $109 million, or 29 cents a share.

On a non-GAAP basis, Novell earned $23 million, or six cents a share, a penny higher than thought.

During the quarter, Novell recognized $12 million in revenues from its SuSE Linux business. Subscriptions to SuSE Linux Enterprise Server (SLES) came to $7 million, up 68% sequentially.

The other $5 million came from retail sales of SuSE Linux Professional, technical support, alliance fees and other software.

Novell said it sold 21,000 SLES subscriptions in the quarter. The number doesn't include three potentially large, enterprise-wide, multi-year agreements it cut with Fortune 100 companies. Novell executives said that in the near-term these customers might deploy 4,000-6,000 servers and could deploy over 25,000 servers over time.

NetWare sales continue to shrink although the decline is supposedly slowing. NetWare-related revenues were down 13% year-over-year while revenue from collaboration products fell 6%.

Identity and resource management revenues were both up 10% year-over-year. Identity management revenues were $28 million in Q4 quarter.

Management and collaboration products did $65 million while services platform and storage, which includes NetWare and Linux, brought in $85.4 million. Worldwide services revenues amounted to $83 million, up 7% year-over-year.

As previously reported, Novell streamlined its product line into two business units in September - platforms and identity products. David Patrick heads the platform business, which includes Linux and NetWare, while David Litwack is responsible for identity management web services and resource management products.

Novell expects Open Enterprise Server, its anticipated Linux-NetWare combo, to move into open beta in mid-December and launch in February.

Novell executives portrayed an IT spending environment that has yet to pick up steam. Novell CEO Jack Messman said that although "IT demand trends are slowly improving, CIOs are still cautious on IT investments."

As usual, Novell did not provide specific guidance for the current quarter but told analysts to expect NetWare revenues to continue to fall in 2005. The decline will need to be offset by other products.

Novell said it would see $438 million from its recent $536 million settlement with Microsoft. It lost $100 million to "transaction costs" and taxes. It got the money from Microsoft yesterday.

Novell ended the quarter with $1.2 billion in the bank, up from $1.1 billion at the end of Q3.