BOSTON, March 25 (Reuters) - Oracle Corp reported a higher quarterly profit on Wednesday, but its 16 percent rise in new software sales was at the low end of expectations, and its shares fell more than 8 percent.

Net income rose 25 percent to $1.34 billion, or 26 cents per share, in Oracle's fiscal third quarter ended Feb. 29, from $1.03 billion, or 20 cents, a year earlier.

Sales of new software, which investors look to as a key indicator of the future financial performance of business software makers, rose to $1.6 billion in the quarter, from $1.4 billion a year earlier.

Oracle in December had forecast third-quarter new software sales to be 15 percent to 25 percent higher than a year earlier. Wall Street analysts were expecting the company to report growth around the mid-point of that range.

New software sales figures are a key indicator because the customers also sign maintenance contracts that cost 20 percent of the product price per year. Also, software makers get extra revenue from customers when they expand the number of workers using a computer program that they have already purchased.

Oracle reported profit excluding items of 30 cents per share, which was in line with Wall Street forecasts, but had non-GAAP revenue of $5.37 billion, which was lighter than the average analyst forecast of $5.415 billion according to Reuters Estimates.

Sales of new business management software rose to $451 million from $421 million a year earlier. Wall Street analysts were expecting about $553 million, said Brendan Barnicle, an analyst at Pacific Crest Securities.

Oracle shares were down to $19.20, or 8.3 percent, in after-hours trading after closing at $20.94 on Nasdaq.

(Reporting by Jim Finkle, Philipp Gollner, Tiffany Wu; Editing by Gary Hill)

© Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.