June 24 (Bloomberg) -- Oracle Corp. President Safra Catz said customers are showing renewed interest in buying software, a sign they expect the recession to ease up.

“Our customers are realizing that business does have to continue and go forward,” Catz said yesterday on a conference call after announcing earnings. “I still see the pipeline growing rather significantly.”

Excluding some costs, fourth-quarter profit was 46 cents a share, Redwood City, California-based Oracle said. Analysts in a Bloomberg survey had estimated 44 cents on average for the period, which ended May 31.

Oracle, the second-largest software maker, is benefiting from service-contract renewals, which have offset a slump in new orders and helped boost profit margins. The company has announced more than $42 billion in acquisitions, expanding the number of customers that pay for those contracts.

Oracle climbed $1.01, or 5.1 percent, to $20.88 at 9:38 a.m. New York time in Nasdaq Stock Market trading. The gain was the largest in two months.

“They are starting to indicate that the worst is behind us,” Sarah Friar, an analyst with Goldman Sachs Group Inc., said in an interview from San Francisco. She recommends buying the shares, which she doesn’t own. “And because of its resilient maintenance revenue, Oracle will continue to be a margin expansion story.”

Profit Forecast

Excluding some costs, profit will be 29 cents to 31 cents a share in the period ending Aug. 31, Oracle said yesterday. Analysts in the Bloomberg survey had predicted 30 cents on average. Sales will be as much as $5.26 billion, in line with estimates.

“It shows that Oracle is managing its business quite well,” said Andy Miedler, an analyst with Edward Jones in St. Louis.

The company’s forecast doesn’t include the impact on earnings from Sun Microsystems Inc. Oracle announced plans in April to buy Santa Clara, California-based Sun, marking an expansion into the less profitable computer-server market.

Oracle has acquired more than 50 companies since 2005. The purchases helped Oracle move beyond its dominant database software, turning the company into a one-stop software market for business customers.

The acquisitions also have stepped up competition with Walldorf, Germany-based SAP AG, the largest maker of business- management software, which handles tasks such as finance, human resources and inventory tracking. Last year’s purchase of BEA Systems Inc. is helping Oracle challenge International Business Machines Corp. for the lead in middleware, software that lets different kinds of programs share data.

Oracle ranks behind Redmond, Washington-based Microsoft Corp. in total software sales.

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

Last Updated: June 24, 2009 09:41 EDT