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Oracle shares rise on higher software sales

Analysts have become increasingly worried that the hardware business Oracle Corp. acquired in 2010 with its $5.6-billion (U.S.) purchase of Sun Microsystems has turned into a liability, with sales falling short of expectations. CEO Larry Ellison delivers his latest report card Tuesday.

Paul Sakuma/AP/Paul Sakuma/AP

Technology giant Oracle Corp said quarterly sales of new software rose 7 per cent from a year earlier to $2.4-billion (U.S.), at the high end of its own forecast.

The world's No. 3 software maker met its key sales goal in its fiscal third quarter ended Feb. 29 after missing targets in its second quarter, which caused the company's profit to fall short of Wall Street forecasts for the first time in a decade.

Oracle had forecast that new software sales would climb between 0 to 10 per cent from a year earlier when it last reported earnings on Dec. 20.

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Investors pay close attention to new software sales because they generate high-margin, long-term maintenance contracts and are an important gauge of the company's future profits.

The company also reported on Tuesday that hardware product sales tumbled 16 per cent to $869-million. It had forecast a decline of between 5 and 15 per cent.

Oracle posted third-quarter profit, excluding items, of 62 cents per share, beating the average forecast of 56 cents of analysts surveyed by Thomson Reuters I/B/E/S.

Oracle shares rose 3 per cent to $31 in extended trade from their Nasdaq close of $30.10.

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