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Linux helps dampen Novell's losses

OS sales up 77 per cent year-over-year

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Novell narrowed losses in the third quarter, bolstered by the SUSE Linux business beginning to pull more weight.

For the quarter ended July 31, Novell reports a net loss of $3.42m, a 48 per cent difference compared with a loss of $6.5m in the same quarter the previous year.

Excluding one-time items, Novell's income from operations totaled $16.1m, down from $23.8m year-over-year. Revenue increased to $243.1m from $236.3m the previous year.

Most of Novell's operation grew during Q3, with Linux leading the charge. During Q3, Novell reports $22m of revenue from Open Platform Solutions. $21m of that sum was from Linux products. This represents a 77 per cent revenue increase for the platform year-over-year.

Novell was also keen to show how much revenue it booked in the quarter: Linux invoicing earned $38m, up 95 per cent year-over-year. Revenue from Identity and Access management was $27m, up two per cent from the previous year. Systems and Resource Management brought in $35m, up four per cent over the previous year. Novell's Workgroup business is the lone unit to report lower revenues, two per cent loss to $83m in the same period a year ago.

"We are encouraged by our Linux performance and the market's continued enthusiasm for our desktop to data center strategy. In addition, we are pleased with our operating margin expansion and progress on our strategic initiatives," said Ron Hovsepian, CEO of Novell.

For the full fiscal year, the company expects to report net revenues between $924m and $955m, in line with prior guidance. For fiscal year 2006, Novell posted net revenue of $967m.

Novell expects to beat its previous guidance for adjusted income of between break-even and $10m. ®

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