NEW YORK (CNN/Money) - Oracle reported better than expected fiscal second quarter results Monday, a possible sign that corporations are finally deciding to spend more on software.

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The Redwood Shores, Calif.-based database software developer posted net income of $617 million, or 12 cents a share, up from $535 million, or 10 cents a share a year ago. Analysts were expecting earnings of 11 cents a share, according to First Call.

Oracle reported revenues of $2.5 billion, an 8 percent increase from a year ago and ahead of the Wall Street consensus estimate of $2.4 billion.

License revenue, a widely watched measure of new software sales, came in at $849 million for the quarter, a 13 percent increase from a year ago. That exceeded the hopes of even the most bullish analysts, who had been predicting at least $800 million in new license revenue.

Shares of Oracle (ORCL: Research, Estimates) surged 2.2 percent in after hours trading, according to Instinet. The stock fell 13 cents, or 1 percent, to $12.70 in regular trading on the Nasdaq Monday.

During a conference call with analysts, Oracle CFO Jeff Henley said that the company was sensing an upturn in its business and as such, he raised sales guidance for the fiscal third quarter, which ends in February.

Henley said revenues should increase between 7 percent and 10 percent from a year ago's sales of $2.31 billion. That implies a range of about $2.47 billion to $2.54 billion in sales, higher than the Wall Street consensus estimate of $2.45 billion. In addition, Henley said that earnings should be either 11 cents a share or 12 cents a share. Analysts were expecting 11 cents per share.

Oracle has lagged the performance of many of its software rivals since Oracle launched a hostile takeover bid for competitor PeopleSoft (PSFT: Research, Estimates) in June. Oracle is still waiting to get regulatory approval from the Department of Justice and European Union before deciding its next move in this protracted takeover saga and the company declined during the conference call to discuss whether it would raise its bid.

But the better than expected results might be what Oracle needed to finally regain the love of investors.

"It's refreshing to see the growth in new software licenses. That's really telling," said Kimberly Caughey, an analyst with Parker/Hunter.

In particular, Oracle's application business, which includes software that helps businesses manage everyday tasks such as supply chains, human resources, and customer relations, appeared to bounce back after a weak fiscal first quarter. New applications licenses came in at $137 million for the quarter, a 27 percent increase from the same period last year.

"Solid execution in the field, a strengthening competitive position, and an improving economy contributed to results that were above expectations," said Henley in a written statement.

Oracle has been trying to bolster its presence in the more lucrative applications business in order to lessen its reliance on the more mature database software market, which accounts for 84 percent of the company's overall license revenue.

In fact, the main reason for Oracle's bid for PeopleSoft is in order to remove a rival in the applications business. Oracle has stated that it would discontinue PeopleSoft's line of applications software if it succeeded in taking the company over.

However, Oracle's database division also reported a solid quarter, with license revenue increasing 10.6 percent from a year ago.

Geographically, software sales in the Americas appeared to finally pick up, an encouraging sign, as new software licenses from the Americas account for 44 percent of overall license revenue. Oracle reported new license sales of $375 million in the quarter, an increase of 21.5 percent from a year ago. That's a stark contrast from the fiscal first quarter when license sales in the Americas plunged nearly 20 percent.

Software license sales in Oracle's Europe and Asia Pacific divisions grew 4 percent and 13 percent from last year's levels respectively.

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Other so-called enterprise software companies, which cater to big businesses, also moved higher after-hours on the Oracle earnings news. Shares of PeopleSoft gained 1.7 percent while BEA Systems (BEAS: Research, Estimates), which has been mentioned frequently as another possible Oracle takeover target, rose 2.7 percent.

Parker/Hunter's Caughey said that Oracle's earnings are a sign of an improving environment for all business software companies and not specific to Oracle.

"Anybody that sells into the enterprise market should be boosted by this news. Oracle is a good company but they're not doing anything much different from the rest of the industry," Caughey said.

But Richard Williams, an analyst with Summit Analytic Partners, said that Oracle may have not raised targets enough to prove that the software recovery is for real. "On the surface the results look good, but there needed to be a noticeable uptick in guidance."

Analysts quoted in this story do not have a position in Oracle and their firms have no investment banking relationships with the company.