Business software maker Oracle Corp reported stronger-than-expected quarterly results and said it would pay its first dividend to shareholders,

New software sales fell a less-than-expected 6 percent from a year earlier to $1.5 billion. Analysts had said they were expecting them to decline about 12 percent as the weak economy and currency fluctuations hurt sales.

The world's third-largest software maker also posted profit, excluding special items, of 35 cents per share for its fiscal third quarter ended Feb 28, beating the average analyst forecast of 32 cents, according to Reuters Estimates.

Oracle said on Wednesday that it would pay a dividend of 5 cents per share, or 20 cents annually, its first such payment to shareholders since the company went public in March 1986.

Shares in Redwood City, California-based Oracle rose 7 percent to $16.97 in extended trade from their Nasdaq close of $15.83.

(Reporting by Jim Finkle; editing by Carol Bishopric)