PeopleSoft Books Solid 2Q Results

In line with its preliminary earnings call earlier this month, PeopleSoft reported strong second-quarter results.

In line with its preliminary earnings call earlier this month, PeopleSoft Inc. reported strong second-quarter results Thursday.

The company reported license revenues of $112 million, a sequential increase of 38 percent, and total revenues of $497 million, an 8 percent sequential increase.

PeopleSoft also beat its own earnings guidance for the quarter, posting 14 cents earnings per share, above its original estimate of 11 to 12 cents per share.

"The simple truth behind our strong quarter is that we are a strong company," said Craig Conway, PeopleSofts president and CEO, in this evenings earnings call with analysts. "When we pre-announced for Q2 a couple of weeks ago, on the surface we appeared very strong. Beneath the surface we are even stronger."

License revenues grew in every product category, with new customers in every sector, with over 100 new customers this quarter, versus 72 new customers in the first quarter.

License revenue for new customers was up from previous years to 36 million, with 78 million booked from existing customers.

PeopleSoft also experienced a 4 percent growth in its pipeline, over the previous quarter.

"The speculation that Oracle drained our pipeline simply is not true," said Conway. "We went into Q3 four percent higher. It was our best quarter in two years."

Oracle, of Redwood Shores, Calif., lobbed a hostile takeover bid at PeopleSoft in early June, just days after it announced its intentions to acquire enterprise resource planning software maker J.D. Edwards & Co.

Conway also said speculation that the company increased sales through customer discounts or large deals with IBM and Microsoft are unfounded.

Kevin Parker, PeopleSofts CFO, said that the challenging circumstances created by Oracles hostile bid remain for the third quarter. As a result, the company expects to spend $10 million in that quarter to fight Oracle—which is expected to negatively impact 13 to 14 cents per share earnings by 2 cents.

On the other hand, PeopleSoft expects to save $150 million to $250 million in synergies with J.D. Edwards & Co.

Completion of that transaction is expected by midnight tonight.