PeopleSoft originally expected pro forma earnings per share of $0.21 on sales of $689m for the quarter ending June 30. It lowered expectations earlier this month to pro forma earnings of $0.13 to $0.15 on sales of $655m to $665m.
In the event, revenues were $647.3m, up 30.1% on the year, with license fees climbing 16% to $130m. Operating income slipped 71.5% to $14.3m, while net income was down 70% to $11m. This resulted in earnings per share of $0.03, or $0.14 pro forma.
CEO and president Craig Conway cited a number of challenges that PeopleSoft faced during the quarter, in common with other companies, from Sarbanes Oxley, to the war in Iraq, to the US presidential campaign.
But he was unequivocal in blaming publicity surrounding the trial of the US Department of Justice’s objections to Oracle’s hostile takeover of the company during June for damaging PeopleSoft’s ability to close business in the closing weeks of the corner.
In a conference call announcing the results, Conway added that deal closings were disrupted by some of the evidence disclosed during the trial. Companies were armed with all of our discount forms, he said.
CFO Kevin Parker said that if the takeover issue goes away, the firm had a bright future. Conway said Don’t doubt the upside for this company when we’re on a level playing field.
However, given the second quarter’s impact on the company’s expectations for the full year, and the uncertainty surrounding the outcome of the trial, PeopleSoft said it would delay giving detailed guidance for the second and third quarters until after a verdict has been delivered.
For the year so far, sales were up 34.7% to $1.3bn. Operating income was down 53.7% to $47.2m, while net income was down 53% to $35.1m.
The company also highlighted the legal costs it has incurred fighting the takeover bid. So far it has spent $70m fighting Oracle, with $17m being spent in the last quarter alone.
