June 26 (Bloomberg) -- Oracle Corp., the world's third- largest software maker, said fourth-quarter profit rose 23 percent, beating analysts' estimates, buoyed by database sales and recent acquisitions.

Net income climbed to $1.6 billion, or 31 cents a share, from $1.3 billion, or 24 cents, a year earlier, Redwood City, California-based Oracle said today in a statement. Sales rose 20 percent to $5.83 billion in the quarter ended May 31.

Oracle Chief Executive Officer Larry Ellison said he will continue buying companies to enter new markets. He expanded his pool of customers last quarter with four acquisitions, including the $3.3 billion purchase of Hyperion Solutions Corp. Oracle has spent $20 billion buying rivals since 2005, making it the most acquisitive company in the industry.

``Application vendors in various sectors and industries are the targets for Oracle,'' Peter Misek, an analyst at Canaccord Capital Corp. in Toronto, said in an interview. ``We continue to see them as a consolidator.''

Profit, excluding acquisition expenses and other costs, was 37 cents a share, beating the 35-cent average estimate of analysts surveyed by Bloomberg. Oracle had forecast profit of 34 cents a share, compared with 29 cents a year earlier. The company typically reports its biggest profit and sales in its fourth quarter.

The shares rose 19 cents, or 1 percent, in extended trading after the report. They dropped 32 cents to $19.16 at 4 p.m. New York time in regular Nasdaq Stock Market trading. The stock has advanced 12 percent this year.

Forecast

Oracle forecast first-quarter profit of 21 cents a share, excluding some costs, meeting the average analyst estimate in a Bloomberg survey.

Sales that include deferred revenue from acquisitions will climb to between $4.32 billion and $4.43 billion, a rise of as much as 21 percent, Oracle said. Analysts had expected sales to gain 15 percent to $4.11 billion, according to the Bloomberg survey.

``We expect this to be our largest first quarter ever,'' Oracle President Safra Catz told analysts today in a conference call.

Sales of new software licenses are forecast to rise to between $964.8 million and $1.05 billion, growth of as much as 30 percent, Oracle said.

`Strong Growth'

``That's strong growth,'' Peter Kuper, an analyst at Morgan Stanley, said in an interview from Boston. He rates Oracle ``equal weight'' and doesn't own any shares. ``In this market, how many companies can put up this kind of growth while maintaining 46 percent operating margin, like it did this quarter?''

Database sales in the fourth quarter gained 19 percent to $1.76 billion, accounting for 71 percent of new software license revenue for the quarter. That compares with an estimate of $1.63 billion from Sarah Friar, an analyst at Goldman, Sachs & Co. Sales of applications advanced 13 percent to $726 million.

``Database sales were better than most of us expected, which is good because the database business is still the most important part of Oracle,'' said Friar, who rates Oracle a ``buy'' and doesn't own the shares. ``The surprise is that application sales weren't better.''

Buying Streak

Oracle's acquisitions have propelled the company beyond its original database programs into business-management applications and middleware, software that connects servers. Oracle has purchased 31 companies since January 2005, including PeopleSoft Inc. and Siebel Systems Inc.

Oracle reports sales that don't conform to generally accepted accounting principles. On that basis, sales last quarter were $5.88 billion, exceeding the $5.6 billion estimated by analysts in a Bloomberg survey. Oracle in March forecast $5.43 billion to $5.63 billion.

Total new license sales, an indicator of future growth and maintenance fees, rose 17 percent to $2.48 billion, topping Oracle's own forecast.

Speaking to 6,000 sales people in Las Vegas this month, Ellison set a goal of $50 billion in annual sales by 2012, according to a person with knowledge of his comments. That would require a growth rate of about 23 percent.

Oracle ranks behind Microsoft Corp. and International Business Machines Corp. in global software sales. The company is the world's biggest maker of database software.

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

Last Updated: June 26, 2007 19:48 EDT