Novell Turns A 3Q ProfitNovell Turns A 3Q Profit

Novell Inc. is reporting a big turnaround in its financial picture. The networking company is reporting a third-quarter profit of $23.4 million on sales of $304.6 million. A year ago, Novell reported a loss of $12.4 million on sales of $282.8 million. This quarter, ended July 31, was Novell's second since acquiring SuSE Linux AG.

Maintenance and service fees greatly bolstered Novell's revenue, while software sales dropped compared with the same quarter a year ago. The company sold $245.9 million in maintenance and services for the quarter, compared with $213.6 million a year ago. Software sales for the most recent quarter fell to $58.7 million from $69.3 million last year.

Novell also enjoyed a one-time $14 million bump in revenue and $5 million in interest income resulting from a May courtroom win over The Canopy Group Inc. Novell had sued Canopy to recover a royalty payment for the DR-DOS product that Novell had sold to Canopy.

About $12 million in third-quarter revenue came from the company's SuSE Linux business. Subscriptions to SuSE Linux Enterprise Server reached 19,000 units in the quarter, with 12,000 of the units sold to one customer. Novell didn't identify the customer, saying only that the subscriptions are for both servers and PCs.