Updated from Sept. 19

Shares of

Oracle

(ORCL) - Get Report

shot to a five-year high after the database giant beat Wall Street's EPS expectations by 2 cents and grew its top line by 30%, its best fiscal first quarter in four years.

In early Wednesday trading, the stockrose more than 12% to $18.14, the first time the issue has been that high since July 2001.

Oracle said late Tuesday that its profit grew to $670 million, or 13 cents a share, from $519 million, or 10 cents a share, a year ago. Total revenue was $3.59 billion vs. $2.77 billion a year earlier.

Excluding the cost of stock-based compensation and other items, the company earned a profit of 18 cents a share.

Analysts polled by Thomson First Call were looking for a profit of 16 cents a share on sales of $3.47 billion.

The best news in the earnings report was the company's strong sales of software licenses for both its core database business and its applications business. Total sales of software licenses were up 29% to $2.7 billion, while the combined database and middleware business grew 15% to $576 million in new license sales.

The applications business, which Oracle has spent more than $13 billion to build via acquisitions in the last few years, grew 80% to $228 million in new license revenue. Analysts were expecting license sales of $213 million.

"We're rapidly taking applications market share from

SAP

(SAP) - Get Report

," said Oracle President Charles Phillips in a press release.

Including license updates and support, the applications business added $931 million to the top line, an increase of 57%. The hefty rise in the total applications business is in line with numerous statements by CEO Larry Ellison, who has urged analysts and investors to consider the ongoing maintenance stream Oracle reaps from its huge installed base. Until recently, new license revenue was the key metric of growth in software, but as the business has matured, subscription revenue, which is ongoing, has gained a higher profile.

On the same basis, the database business grew to $1.8 billion, an increase of about 18%.

CFO Safra Catz said on a conference call with analysts that the pipeline for second-quarter sales is "very robust" and forecast second-quarter EPS of 22 cents, which is in line with Wall Street's expectations. Sales guidance was a bit better than expectations. Catz said the company expects to boost the top line by 22% to 24%, or from a range of $4.02 billioin to $4.08 billion. Analysts were looking for a revenue forecast of $3.97 billion.

Oracle's now-robust applications business poses a challenge to SAP, its major rival, and the company's executives were quick to crow about their success. Besides saying Oracle has stolen significant share from SAP's core business applications business, Ellison said his company is two years ahead of SAP in developing a next-generation software platform.