Sept. 20 (Bloomberg) -- Oracle Corp., the world's third- largest software maker, posted a 25 percent jump in first- quarter profit, beating analysts' estimates, after sales of new programs rose the most in 10 years.

Net income advanced to $840 million, or 16 cents a share, from $670 million, or 13 cents, a year earlier, the Redwood City, California-based company said today in a statement. Oracle also gave a forecast for this quarter that topped projections.

Sales advanced by more than 20 percent for the sixth straight quarter after Chief Executive Officer Larry Ellison sold a greater variety of products to retail, telecommunications and financial-services clients. Sales of new software licenses, an indicator of future growth, jumped 35 percent to $1.09 billion, the biggest quarterly advance in a decade.

``They are performing consistently, even in challenging markets,'' Peter Kuper, an analyst with Morgan Stanley, said in an interview from Boston. He rates Oracle ``equal weight'' and said he doesn't own the shares. ``Few stocks have shown this steady performance, with very clean quarters.''

Revenue rose 26 percent to $4.53 billion in the period ended Aug. 31, typically Oracle's slowest quarter.

Profit, excluding stock-based compensation costs, will rise to 26 cents to 27 cents a share in the current quarter, Oracle Chief Financial Officer Safra Catz said today on a conference call. Analysts in a Bloomberg survey estimated 26 cents.

Sales Gain

Sales that include deferred revenue from acquired companies will gain 18 percent to 21 percent from a year earlier, Oracle said, indicating sales of $4.97 billion to $5.1 billion. Analysts had estimated sales of $4.88 billion.

Oracle advanced 10 cents to $21.14 in extended trading. The stock rose 20 cents to $21.04 at 4 p.m. New York time in Nasdaq Stock Market trading and has gained 23 percent this year.

New software sales will rise as much as 25 percent to $1.51 billion in the second quarter, Catz said. Oracle attributed increasing sales to its strategy of focusing on specific industries.

``We are just at the very beginning of penetrating these markets,'' Ellison said in the call. ``They will be a bigger and bigger part of our business every year.''

Excluding costs such as stock-based compensation, first- quarter profit rose to 22 cents a share, beating the 21 cents estimated by analysts in a Bloomberg survey. Sales that include deferred revenue advanced to $4.59 billion, beating the $4.33 billion average estimate.

Database Sales

New database-license sales rose 23 percent to $711 million. Business-management programs, used to manage functions such as payroll and human resources, gained 65 percent to $376 million.

``They outperformed on both sides of their business,'' Sarah Friar, an analyst at Goldman, Sachs & Co., said in an interview from San Francisco. Oracle is ``hurting a lot of single-product companies,'' she said.

Microsoft Corp. and International Business Machines Corp. rank ahead of Oracle in global software sales. Oracle is the biggest maker of database software.

In June, Oracle had predicted net income of 15 cents a share. Excluding costs such as stock-based compensation, Oracle forecast profit of 21 cents. The company said sales, including deferred revenue, may climb to as much as $4.43 billion.

``The pipeline is extremely strong,'' Catz said on the call. ``We read the papers, too, and we do take into account what's going on,'' she said, in response to a question about whether turbulence in the financial sector is affecting sales.

Software Acquisitions

Oracle's purchases this year of Hyperion Solutions Corp. and Agile Software Corp. also boosted results in the quarter.

Since Oracle completed its $10.3 billion hostile takeover of PeopleSoft Inc. in 2004, the company expanded to offer applications in new markets, and more programs for handling tasks such as organizing documents and analyzing data.

``Oracle's application business pulls along database and middleware,'' said UBS AG's Heather Bellini, in an interview from New York. She rates Oracle ``buy'' and said she doesn't own the shares. ``Their vertical focus takes them into markets where the competition isn't as heavy.''

To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net.

Last Updated: September 20, 2007 20:38 EDT