PeopleSoft Beats Estimates in Early 2Q Results
PeopleSoft Clint Boulton, a senior writer at CIO, covers IT leadership, digital transformation, and the CIO role. He was a content marketer for Dell APEX. Inspire IT leaders with tales about the advantages of multi-cloud infrastructures. Dunning-Kruger bias is something that keeps IT leaders sceptical, but curious nonetheless. surprised the industry
Wednesday when it said preliminary results for the second quarter beat the average Wall Street estimates of earnings-per-share by one to two pennies — all in the face of a hostile takeover bid from rival Oracle .
The company said it expects new software license revenue for the quarter to be in the vicinity of $105 to $115 million, compared to anticipated license revenue of $90 million. Total revenue for the quarter is expected to be between $490 and $500 million, up from industry estimates of between $390 million and $500 million.
PeopleSoft Chief Financial Officer Kevin Parker said on a conference call that PeopleSoft closed more than 30 deals and more than $1 million in license fees.
“Also during the quarter, over 30 percent of our license revenues came from new customers,” Parker said.
The news flies in the face of reason, since the enterprise applications maker has been cast into a sea of uncertainty since Oracle made a hostile bid to acquire it for $6.3 billion last month. Experts and industry analysts have been predicting that the embattled company would see a severely disrupted sales cycle as a result of the bid. Pundits expected Oracle's aggressive actions to freeze customer action on PeopleSoft sales.
A vindicated PeopleSoft President and CEO Craig Conway discussed the preliminary results on a conference call.
“There's been a lot written about this hostile takeover attempt, speculation about the intent to disrupt the J.D. Edwards acquisition, theories about the legitimacy of the offer, the probability the offer was anti-competitive, and regardless of all of that the harm that can result in the enterprise software industry when customers become concerned about your future — lots of speculation, lots of theories,” Conway said. “The one thing that everyone seemed to agree on from the very beginning was that PeopleSoft could not possibly make its quarter. Investment analysts, industry analysts in the press all warned of a sharp decline in our license business. In fact, some indsutry analysts went a step further. For example, Gartner immediately issued an alert advising their clients to stop purchasing PeopleSoft applications. Some customers listened. I'm happy to say that many customers did not.”
The executive said PeopleSoft pressed on “against all odds and odd makers” to actually win new customers, as well as conduct new business with existing clients. Conway listed three reasons for this, including a superior product, customer confidence in its products, as well as the backlash on Oracle for making its hostile bid.
Still, despite the anticipated success in the face of adversity, Conway said PeopleSoft's was “not entirely Cinderella story” for the way the quarter ended. He noted that the company was prevented from perhaps enjoying more success by customer delays and even customer defections to another vendor from Oracle's manuevers. Conway hinted at further litigation, noting PeopleSoft will “seek redress for all of those losses from Oracle.”
Earnings per share from recurring operations are expected to be 13 or 14 cents per share compared to the company's previous guidance of 11 or 12 cents per share. Earnings per share, including previously announced non-recurring items, are expected to be 10 or 11 cents per share, compared with the company's original guidance of 8 or 9 cents per share.
PeopleSoft, which has a reputation of being a customer-friendly company, has kept up its fight to fend off Oracle's bid, appealing to customers to stay with the company.
Tuesday, the vendor published a public plea to its stockholders to reject Oracle's bid and vote for PeopleSoft's merger proposal with Denver's J.D. Edwards for $1.75 billion a day after Oracle appealed to PeopleSoft to approve its merger proposal. Most recently, the firms agreed to postpone their lawsuits against each other.
Final results for the Pleasanton, Calif.-based PeopleSoft's second quarter results will be released later this month.
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