The company, which also provided a financial outlook for the first time in two years, said its fourth-quarter net loss was $5m (?.89m), or 1 cent per share, compared with a net profit of $15m, or 3 cents per share, a year earlier.
Excluding items such as restructuring charges of $38m, the company said it posted a quarterly profit of 7 cents per share. On that basis, analysts on average were expecting the company to post a per-share profit of 3 cents.
"We had a very strong finish to our year," Novell Chief Financial Officer Joseph Tibbetts told Reuters. "We saw our key areas growing both in Linux and in Identity."
The results come after Novell said in early November it would restructure its business in a move that would reduce annual expenses by more than $110m. The company is seeking to replace its shrinking networking software business by building update and support services for Linux software.
The company plans to concentrate on opportunities in the Linux and open source and identity and resource management markets.
Fourth-quarter revenue rose to $320m from $301m as demand for both software licenses and maintenance and services increased from a year earlier. The Wall Street forecast was for revenue of $299m.
Total operating expenses rose to $224m from $175m as the company continued its push to restructure its field operations and focus its business on the Linux and Identity management markets.
The company also issued its first financial forecast in about two years. It sees first-quarter 2006 revenue ranging from $260m to $270m with earnings per share at 2 cents to 3 cents. This excludes an estimated 3 cents per share cost from the expensing of stock options.
It also said the previously announced restructuring would hit revenue by about $40m to $50m in fiscal 2006, excluding expected declines in its legacy work-group business.
The company also said it was targeting operating margins between 12 percent and 15 percent for fiscal 2008.
Novell shares rose 4.2 percent to $7.99 in after-hours trading on Inet from a Nasdaq close of $7.67. In regular trade, the stock fell 11 cents, or 1.4 percent.
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