PeopleSoft Revenues, Income Tumble

PeopleSoft Inc., which has been a star performer in an enterprise software space sagging under the weight of the slowing economy, saw revenues and profits fall in the first quarter of 2003 as license revenues took a big hit.

The Pleasanton, Calif., companys overall revenues dropped to $460.3 million from $483.3 million in the same period last year. License revenues were down to $80.8 million from $133.3 million in the year-ago period.

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In response to the drop-off in revenues, PeopleSoft announced a restructuring that would cut 200 jobs and close its Santa Clara, Calif., office, resulting in a $12 million charge to be taken in the second quarter. PeopleSoft had 8,180 employees at the end of March.

PeopleSoft did manage to offset the license revenue downturn somewhat with a $27 million increase in services revenue, mainly from maintenance contracts.

Net income still fell though, from $44.5 million to $38.5 million.

PeopleSoft President and CEO Craig Conway said in a statement that the company posted "solid" results despite the economy.

"The recovery that began in Q4 was fragile and simply ended with additional economic concerns and geopolitical tensions," he said. "While PeopleSofts license revenue was impacted, professional services and maintenance revenue remained strong during the quarter."

PeopleSoft added 70 new customers during the quarter and generated $75 million in cash.