Novell Beats Estimates

Updated from 5:22 p.m. EDT

SAN FRANCISCO -- Open-source software developer Novell(NOVL Quote) beat Wall Street's third-quarter estimates Wednesday, narrowing its loss from a year earlier.

The Waltham, Mass., company reported revenue of $243.1 million, up 2.9% from a year earlier, when revenue totaled $236.3 million. Analysts had expected a top line of $234.8 million.

Novell narrowed its loss to $3.4 million, or a penny a share, vs. a loss of $6.4 million in the year-ago period.

Excluding items, EPS was 5 cents, beating analysts' estimates of 2 cents a share.

The stock was recently trading up 21 cents, or 3.1%, to $7 in after-hours trading.

Cash flow from operations was $26 million, vs. $36 million in the year-ago quarter. Deferred revenue was up 88% year on year to $734 million.

The company stuck to its prior guidance for full-year revenue ranging from $925 million to $955 million. Analysts were predicting revenue of $943.7 million. Novell said full-year net income, less items, would surpass its previous guidance of break-even to $10 million. Analysts were projecting a bottom line of $9.23 million.

The company's guidance implies a fourth-quarter top line of $218 million to $248 million. Analysts were expecting $240 million.

Novell's open platforms business, which includes Linux, was up 77% year over year to $22 million, and Linux platform invoicing rose 95%, to $38 million. That business unit benefited from a large deal with a company in India buying SUSE Linux for 30,000 desktops and 2,000 servers.