SAN FRANCISCO — Oracle Corp. shrugged off a sharp drop in its business software sales with dramatic expense cuts to deliver a quarterly profit Tuesday that beat analysts' expectations.

        The technology bellwether earned $655.9 million, or 12 cents a share, for the three months ended May 31. That represented a 23 percent decline from net income of $854.9 million, or 15 cents a share, at the same time last year.

        Oracle said its earnings in the latest quarter would have been 14 cents a share, if not for a $173.5 million charge to account for the diminished value of its 32 percent stake in another software maker, Liberate Technologies. On that basis, the results exceeded the consensus estimate of 12 cents a share among analysts surveyed by Thomson Financial/First Call.

        The pleasant surprise cheered investors who had been worried that Oracle'sslump would produce an earnings disappointment.

        Oracle's shares fell 27 cents to close at $8.93 on the Nasdaq before the earnings announcement. After Oracle released its results, the shares surged $1, or 11 percent, in extended trading.

        The good news on the profit front overshadowed more bad news in Oracle's sales pipeline. The company's new software sales plunged 29 percent from the prior year to $1.17 billion. Oracle's overall revenue in the quarter totaled $2.77 billion, a 16 percent decrease from last year.

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