December 18, 2012 – Oracle Corp. reported fiscal second quarter sales and profit that topped analysts’s estimates on growing demand for on-demand software.

CEO Larry Ellison has been using acquisitions – including RightNow Technologies last yer and Taleo Corp. this year – to add cloud computing software that customers can access online rather than run on servers. That’s helping Oracle fend off competition from smaller rivals such as Salesforce.com Inc. and Workday Inc., which also offer Internet- based business products.

“These are new technologies that are certainly giving chief information officers more options,” said Josh Olson, an analyst at Edward Jones & Co. in Des Peres, Missouri. “It’s a sticky franchise that will help them weather the storm from these competitors.”

Profit excluding some items was 64 cents a share on sales of $9.11 billion, the Redwood City, California-based company said today in a statement. That compares with analysts’ average projection for profit of 61 cents a share on sales of $9.02 billion, according to data compiled by Bloomberg. Shares of Oracle rose in extended trading. Earlier, they increased 1.7 percent to $32.88 at the close in New York. The stock has advanced 28 percent this year.

New software license and subscription sales – a closely watched metric because it’s a predictor of future revenue – gained 17 percent to $2.39 billion. Analysts on average had anticipated $2.24 billion, according to Olson.

Hardware revenue – including servers and storage gained in the 2010 acquisition of Sun Microsystems Inc. – declined 23 percent to $734 million, while Olson said analysts were expecting $810 million.

Oracle is competing with SAP AG, Microsoft Corp. and a growing number of startups for share of the cloud software market as customers replace aging software and servers with updated, Web-based products.

Since the middle of last decade, Oracle has spent more than $50 billion on more than 80 deals, fueling an expansion in sales and earnings.

Ellison has said Oracle will use cash to boost dividends gradually over time, rather than to make big acquisitions. The company will accelerate dividend payments for its next three quarters, making one payment on Dec. 21 and joining a list of businesses moving up payouts ahead of potential U.S. tax increases next year.

A few days ahead of Oracle's earnings announcement, the vendor expressed its intention to buy utility industry cloud analytics specialist DataRaker for an undisclosed sum.