Buying rivals may be the best way to ensure profit growth

The main driver of growth was sales of database software, with the chief executive Larry Ellison calling the performance "very strong".

Net income in the three months ending February 29 was $635m (�351m). Total revenue, meanwhile, climbed by 9%.

Oracle wants to buy rival Peoplesoft to help it stengthen its non-database business amid increasing competition.

Expansion

The company has had to lower prices to attract new customers and it plans to focus more on selling applications such as accounting and human resources software.

The earnings were broadly in line with analysts' forecasts and shares climbed during after-hours trading in New York.

Analysts said that may help lift the industry as a whole on Friday because the company is seen as a bellwether by many investors and the figures point to a continuing improvement in the business climate.

Revenue from database products gained 16% in the third quarter from a year earlier, while sales of new software rose by 12%.

Takeover bid

Last month, Mr Ellison wrote to shareholders of Peoplesoft to tell them that its $9.4bn offer for the company was final.

Oracle has called on stockholders to tender their shares before the 12 March deadline.

The vote outcome will then be decided at Peoplesoft's annual shareholder meeting on 25 March.