Novell Posts 3Q Profit; Shares Off As Revenue Falls Short

   DOW JONES NEWSWIRES 
 

Software company Novell Inc. (NOVL) swung to a fiscal third-quarter profit amid prior-year charges as margins grew and revenue from its Linux-platform products rose 22%.

But shares fell about 4.5% in after-hours trading as revenue came in slightly under expectations because of slowing in its other businesses.

Novell, which works with open source and proprietary software, is trying to boost the presence of its Linux-based operating system, Moblin, in low-end netbooks, which have lately become hot items. This year, it has announced it will work with Intel Corp. (INTC) to foster the system in netbooks. It also will partner with Affiliated Computer Services Inc. (ACS) to bolster its information-technology operations.

For the quarter ended July 31, Novell earned $17 million, or 5 cents a share, compared with a year-earlier loss of $15 million, or 4 cents a share a share. Excluding items such as stock-compensation and acquisition costs, earnings rose to 7 cents from 5 cents.

Revenue slid 12% to $216 million.

Analysts surveyed by Thomson Reuters projected a 7-cent profit and $217 million of revenue.

-By Alexandra Scaggs, Dow Jones Newswires; 212-416-2673; [e-mail]