Updated from March 20

Oracle ( ORCL) beat Wall Street's top- and bottom-line expectations in the third quarter, as software revenue grew strongly.

The news gave Oracle's shares a much-needed boost. In recent trading on Wednesday, shares were up 65 cents, or 3.7%, to $18.20. The stock has languished for months, following a lackluster second quarter.

Growth in the next quarter, however, will slow in the face of a very tough year-over-year comparison. Oracle's guidance for the May quarter actually missed analysts' projections by a narrow margin.

The database giant said Tuesday that it posted a profit of $1.03 billion, or 20 cents a share, for growth of 35%. Revenue grew 25% to $4.4 billion.

Excluding options and other items, Oracle earned 25 cents a share. Analysts polled by Thomson First Call were looking for a profit of 23 cents a share on revenue of $4.3 billion.

Total software revenue was up 25% to $3.5 billion.

New license revenue for application software grew by an unexpectedly strong 57% to $423 million, while database and middleware license revenue grew 10% to $967 million.

Analysts were expecting application licenses to come in at $368 million and database and middleware licenses to hit $913 million.

Oracle has spent more than $13 billion (net cash) to buy a basket of applications vendors, including PeopleSoft, Retek and Siebel Systems, and Wall Street has been looking for signs that the huge expenditure is paying off. And it now appears to be doing so.

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