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By Alorie Gilbert, 16 December 2003 09:10

NEWS Software licensing sales helped Oracle report a slight rise in quarterly revenue on Monday, a sign that information technology spending is recovering, according to CEO Larry Ellison.

The software maker reported earnings of 12 cents per share on revenue of $2.5bn for the second quarter, ended 30 November. Estimates from analysts compiled by research firm First Call averaged 11 cents per share on $2.4bn in revenue.

Revenue grew 8 per cent compared with the same quarter last year, while earnings rose 2 cents per share. New software licence sales climbed 13 per cent to $849m. Software licence sales are viewed on Wall Street as an important barometer of how well a software company's core products are selling.

An upswing for Oracle, which specialises in corporate software, signals a growing willingness among businesses to buy IT products after three years of slack spending. But Ellison offered a tempered view of the IT rebound.

"There is an upturn, but the upturn isn't dramatic," Ellison said during a telephone conference with securities analysts.

The company reported that new licence sales of applications grew 27 per cent. That growth rate outpaced that of the company's largest competitors in the market - including SAP, Siebel Systems and PeopleSoft - according to Oracle. The software maker has been trying to buy PeopleSoft for the past six months, through an unsolicited bid opposed by PeopleSoft.

Oracle said the fastest-growing part of its applications business is its outsourcing services, which increased 82 per cent in the fourth quarter.

In the third quarter, the company expects revenue to grow by between 7 per cent and 10 per cent. It expects that new software licence revenue will rise 5 per cent to 15 per cent in that quarter, which ends 29 February. For its fiscal year 2004, the company expects "modest spending improvement," Oracle CFO Jeff Henley said.

Alorie Gilbert writes for CNET News.com