Novell Inc swung to a profit on lower expenses and revenue that rose a slender $4m in its fiscal second quarter.

It reeled in $236m from sales in the Q2 period ended 31 April 2008, compared to $232m for the same quarter a year ago.

Novell said the jump in sales of its Linux business software helped offset a drop in sales at its workgroup networking software division.

Linux and other open platform products drove like-for-like sales up 31 per cent to $30m, while the firm’s workgroup revenue fell one percent to $92m for the quarter. The rest of its revenues comes from services.

Novell brought in net income from continuing operations of $5.9m, or two cents a share, compared with a year earlier loss of $2.9m, or one cent a share.

Operating expenses fell to $173m from $180m while profit from continuing operations, excluding items, was six cents a share, beating Wall Street’s Q2 forecast of five cents.

Novell, which is the world’s second biggest Linux software vendor behind rival Red Hat, reiterated its 2008 net revenue outlook of $940m to $970m.

It added that it still expects non-GAAP operating margin between seven per cent and nine per cent, excluding acquisition-related items.

Shares of Novell rose 14 cents, or 2.1 per cent, to close at $6.71 on Nasdaq. ®

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