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Novell's Quarterly Loss Widens

SAN FRANCISCO -- Auction-rate securities tripped up Novell's (NOVL) third-quarter bottom line Thursday, while margins improved.

The loss at the Linux software developer quadrupled to $15.1 million, or 4 cents a share, because of a $15 million writedown related to auction-rate securities. In the same quarter of last year, Novell posted a loss of $3.7 million, or a penny a share.

Revenue at the Waltham, Mass., company grew 3.5% to $245.2 million from $236.8 million in the same quarter of last year. Analysts were looking for a top line of $241.4 million, according to Thomson Reuters.

Excluding items, EPS was 6 cents, a penny better than analysts' estimates. The operating margin, less charges, was 9.9%, vs. 6.1% in the same quarter a year ago.

Shares of Novell were off 10 cents in recent after-hours trading to $5.91.

Total deferred revenue stood at $726 million, vs. $734 million one year ago.

For the full fiscal year, the company projected revenue of $940 million to $970 million, implying fourth-quarter revenue of $228 million to $258 million. Analysts were expecting revenue of $250.7 million and EPS, less items, of 6 cents.

Excluding special charges, full-year operating margin is now expected to be between 8% and 10%, one percentage point higher on each end of the range.

Novell competes with Red Hat (RHT) as a supplier of Linux operating system software.

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