Oracle Corp beat Wall Street forecasts and raised its dividend 20 percent on Thursday, as the business software maker capitalized on resurgent spending on technology.

Its shares initially rose, then fell slightly in after hours trading.

The company run by Silicon Valley billionaire Larry Ellison, which last year branched into server hardware through the purchase of Sun Microsystems, reported sales of $8.8 billion for the fiscal third quarter, up 37 percent from $6.4 billion a year ago. That beat Wall Street forecasts of $8.7 billion.

New software license sales, which generate high-margin, long-term maintenance contracts and are a good gauge of the company's future profits, rose 29 percent to $2.2 billion, ahead of what many analysts had expected.

Excluding one-time items, it made a profit of $2.8 billion, or 54 cents per share, compared with $1.9 billion, or 38 cents per share, in the year-ago quarter. Wall Street had expected 50 cents, on average.

The company boosted its quarterly dividend to 6 cents per share from 5 cents. The 20 percent raise matched that of rival SAP's recent increase.

(Reporting by Bill Rigby; Editing by Richard Chang)