UPDATE 3-Novell profit tops Street, co raises '08 revenue view

(Recasts first paragraph, adds revenue details)

LOS ANGELES, Feb 28 (Reuters) - Business software maker Novell Inc (NOVL.O) on Thursday reported a quarterly net profit that beat Wall Street estimates on lower costs and a 65 percent increase in sales of its Linux open source software and services.

The company also raised its revenue outlook for the year, and its shares rose 4.7 percent in extended trade.

First-quarter net income was $16.8 million, or 5 cents per share, compared with a net loss of $19.9 million, or 6 cents per share, a year ago.

Non-GAAP income from continuing operations was 8 cents a share, above Wall Street analysts' average estimate of 5 cents a share, according to Reuters Estimates.

Revenue was $230.9 million, up from $218.4 million last year. Analysts had been expecting revenue of $224.8 million.

Revenue from Novell's identity and security management business rose 15 percent to $32 million, and systems and resource management revenue climbed 5 percent to $37 million. Workgroup revenue rose 1 percent to $90 million.

Novell said Linux sales rose 65 percent to $28 million during the quarter.

For the full year, Novell raised its net revenue outlook to between $940 million and $970 million. It had previously expected revenue of $920 million to $945 million.

Analysts had been expecting revenue of $933.6 million, according to Reuters Estimates.

Novell shares rose to $6.85 in extended trade after closing at $6.54 on Nasdaq. The stock had fallen 3.5 percent in the regular session. (Reporting by Nichola Groom, editing by Phil Berlowitz)