Novell said yesterday that $6.1m in Linux and platform services revenue reported as new software licenses was, in fact, income from maintenance and services.
The company, which has been re-inventing itself from a network operating systems dinosaur to a Linux products and services player in recent years, revealed the slip during in a filing with the US Securities and Exchange Commission (SEC).
The error does not affect Novell’s overall results but means money has been simply moved from one column in the company’s accounting books to another column.
Novell said new revenue from software licenses for the first fiscal quarter of 2005, reported last week, should have been reported as $44.3m instead of $50.4m. Maintenance and services, originally reported at $239.7m, is now stated at $245.8m.
News of the slips saw shares in Novell drop below their 52-week trading low, as Wall Street expressed its displeasure. At one point, shares traded as low as $4.94 and ended the day down at 1.32% to close the day on $5.24.
Prudential Equity Group, meanwhile, lowered its investment rating from neutral to underweight. One Prudential analyst was quoted as saying the restatement caused Prudential to wonder if there are deeper issues that are not apparent on the surface.
