At Novell, Too Soon to Celebrate

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Christmas came early for Novell (NOVL) this year. The British government's National Health Service has awarded the software company a $40 million contract. The biggest deal Novell has closed in recent history, it helped the outfit push past analyst expectations of $300 million in fourth-quarter sales, which instead totaled $320 million. It was the highest revenue quarter for Novell in years, crowed Chief Executive Jack Messman on the company's conference call.

Profits, however, were another story. Novell lost $5 million thanks to restructuring costs, vs. a profit of $15 million a year ago.

Yet the deal and relatively strong quarter gave the embattled CEO some much-needed good news. After the company's lackluster third-quarter results, Messman came under criticism from investors and analysts for lacking a technical vision, hoarding cash, and investing too heavily in its legacy businesses.

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