Updated from 8:15 a.m. EST

BEA Systems

(BEAS)

increased third-quarter revenue by 5% and beat earnings expectations by a penny, but license revenue slipped by 10% year over year, the business software vendor announced after the close of trading on Thursday.

BEA posted a profit of $33.5 million, or 8 cents a share, compared with $29 million, or 7 cents a share a year ago, according to generally accepted accounting principles. Revenue was $264.4 million, compared with $252.1 million in the same period.

Excluding items, the San Jose, Calif.-based company earned a profit of 9 cents a share. Analysts polled by Thomson First Call were expecting a profit of 8 cents on sales of $262.9.

In early trading Friday , the stock was recently up 27 cents, or 3.3%, to $8.46.

But license revenue, a critical measure of new business for software companies, slipped to $114.9 million from $128.2 million in the same quarter last year, although it was roughly in line with expectations. "Our top priority is to grow license revenue," said founder and CEO Alfred Chuang.

Looking ahead to the fourth quarter, the company said revenue would likely range from $280 million to $290 million, which puts the company on the high end of analysts' expectations of $282 million. BEA did not give EPS estimates but said operating profit would range from 22% to 23% of revenue.