Oracle Wednesday told a skittish market behaving lately like a bunch of old ladies that its fiscal Q2 earnings were up 35% to $1.3 billion, or 25 cents a share, on revenues up 28% to $5.3 billion.

Having done better than expected, the company's stock rose in after-hours trading after being down on the day and the exchange held its collective breath waiting for the company's guidance and any sign that spending is slowing.

During its conference call Oracle projected new software licenses would be up 15%-25% this quarter and total revenues up 20%-23% with GAPP earnings of 23 cents-25 cents and non-GAPP earnings of 29 cents-30 cents.

It said, "We are seeing more deals and each deal is a little bigger than in the past."

In the last quarter, Oracle's total GAAP software revenues were up 29% to $4.2 billion with new software license revenues up 38% to $1.7 billion. Database and middleware new license revenues were up 28% and applications new license revenues were up 63% to $553 million. Services revenues were up 22% to $1.2 billion.

Second-quarter non-GAAP earnings per share were up 40% to 31 cents, and non-GAAP net income was up 38% to $1.6 billion. The Street had figured about 27 cents and $300 million less in revenue.

In a canned statement Oracle CFO Safra Catz reveled that, "In Q1 we reported new software license revenues up 35%, the strongest growth of any quarter in 10 years. In Q2 we did even better with new software license sales up 38%. GAAP EPS were up 36%; non-GAAP EPS were up 40%. We exceeded our guidance and our best case forecast with strong revenue growth across all product lines and geographies."

She attributed the magic to simply "selling more software to more companies in more countries."

So Oracle's diversifying acquisition strategy continues to pay off. It also appears to integrate well. It's running on a 41.3% margin.

President Charles Phillips took a shot at Oracle's main rival SAP pointing out that while Oracle's new application licenses were up 63% SAP's were only up 15%. "We like our growth strategy of expanding beyond ERP into high-end industry-specific vertical software in contrast to SAP's strategy of moving down market to sell ERP systems to small companies," he said.

Thinking of SAP's new BusinessBy Design software, CEO Larry Ellison said that Oracle would need new products and a new sales force to chase the low-end market SAP is chasing. Oracle prefers to leverage its relationships, he said. Anyway it's more profitable at the high end.

Ellison claimed Oracle continues to take market share from IBM in both database (up 19%) and middleware new license sales. Middleware, up 80%, he said, is Oracle's "fastest-growing product," putting Oracle somewhere between Microsoft at number one and IBM at number three.

Ellison also claimed that Oracle was "early in verticals" and that some of them - like banks and telecom companies - were "almost green fields" because they had to rewrite their legacy applications. SOA, he contended, is a 10-20 year journey that SAP couldn't go on because it has nothing in its rucksack.