PeopleSoft Inc. this morning announced better than expected preliminary financial results for the second quarter, adding resonance to the enterprise software makers stance that Oracle Corp.s hostile takeover bid undervalues the company.
Oracle, of Redwood Shores, Calif., has made an all-cash bid for rival PeopleSoft valued at $19.50 per share, or about $6.3 billion.
Based on preliminary information, PeopleSoft expects to post license revenue between $105 million and $115 million for the quarter. Total revenue is expected to be in the range of $490 million to $500 million, which puts earnings per share at 13 cents to 14 cents. The Pleasanton, Calif., company originally gave earnings guidance of 11 cents to 12 cents per share for the quarter.
"This morning we announced that against all odds and odds makers, under the most challenging conditions a company can face, PeopleSoft not only met but significantly exceeded our original financial guidance," said PeopleSoft President and CEO Craig Conway, in a statement.
Oracle executives have been trying to woo PeopleSoft shareholders and even raised its original offer to convince them to approve the purchase. But PeopleSofts board of directors has consistently said that Oracles offer is not high enough. The company likely will use todays financial news as further ammunition.
PeopleSoft will release final results on the quarter later this month.
Oracle, for its part, is facing mounting scrutiny of its effort to buy PeopleSoft. Earlier this week, the U.S. Department of Justice lobbed a so-called second request for information at Oracle. The request seeks information to determine the competitive nature of the transaction.
In light of the DOJs latest move, which could require a significant amount of resources on Oracles part, Oracle released a statement late yesterday saying that it has agreed to postpone a hearing scheduled for July 16 in its suit against PeopleSoft and J.D. Edwards & Co., another enterprise software developer that PeopleSoft has announced it will acquire. Oracle is alleging in the suit that "PeopleSoft and its board have breached their fiduciary duties to PeopleSoft shareholders" by refusing to revoke its so-called poison pill. The poison pill is a strategy used by corporations to discourage a hostile takeover bid.
"Oracle will continue to seek redemption of the PeopleSoft poison pill," said Oracle spokesman Jim Finn, in a statement.