PeopleSoft exceeds earnings targets

In its takeover dance with Oracle, PeopleSoft pulled out some fancy footwork on Thursday, reporting third-quarter earnings that exceeded its own estimates.

The software company, the target of a 16-month hostile takeover by Oracle, reported a third-quarter profit before certain charges of $62 million, or 17 cents a share, on revenue of $699 million. The company had forecast earlier this month that revenue would not exceed $695 million and that earnings would not top 14 cents a share.

While PeopleSoft's earnings per share were flat compared with the same period last year, the company saw revenue grow by 12 percent year over year. That growth came from a surge in maintenance revenue, which increased 36 percent to $320 million from $235 million in the same quarter a year ago.

However license revenue, a key indicator of future growth, was almost flat compared with last year at $161 million. Professional services revenue declined slightly to $217 million from $229 million last year.

PeopleSoft Chief Executive Officer Dave Duffield, who was brought in earlier this month to replace former CEO Craig Conway, made a few brief comments about the ongoing Oracle bid, during a teleconference. The comments appear to leave the door open, or at least ajar, for Oracle.

"It's been amusing to listen to what people think I'm going to do," Duffield said. "Some people have speculated that I'm here to sell the company to Oracle. Others are guessing I'm here to block a sale. Both are wrong. I'm here to make sure that our company obtains its full potential, something that absolutely enhances value to our shareholders."

PeopleSoft ousted Conway about the same time the U.S. Justice Department decided to drop its effort to challenge an Oracle takeover on antitrust grounds. Conway was staunchly opposed to an Oracle merger, and his departure is a signal to some observers that the company is softening its stance against the deal.

PeopleSoft earned $24 million, or 6 cents a share, under generally accepted accounting principles. In the same quarter last year, the company lost $7.3 million or 2 cents per share on a GAAP basis, which includes costs related to its $1.8 billion acquisition of J.D. Edwards.

In a statement, the company's chief financial officer, Kevin Parker, lauded PeopleSoft's third-quarter financial performance as delivering "the hallmarks of a healthy and vibrant company."

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.