PeopleSoft’s born again CEO Dave Duffield has struck a less paranoid stance towards hostile suitor Oracle as he unveiled what the firm said was a strong and balanced third quarter financial performance yesterday.
The firm’s leadership also said it saw a more stable software environment, a quarter after PeopleSoft and other major vendors were caught out by a chill on software spending in the second quarter.
Founder and former CEO Dave Duffield returned to the top spot at the firm early this month after the board lost confidence in Craig Conway’s leadership.
Duffield said that some were speculating he was brought back to sell the company to Oracle, while others expected him to continue to block the deal. Both are wrong, he said. I’m here to make sure the company fulfills its potential.
Duffield and his team clearly saw the third quarter as showing one way the company could do this.
Total revenues came in at $698.8 million, up 11.9% on the year. The vendor turned in an operating profit of $35.3 million, compared to last year’s $9.5 million loss. Net income was $23.6 million, compared to a loss of $7.3 million a year ago. This resulted in earnings per share of $0.06, or $0.17 pro forma. Analysts had expected earnings per share of $0.14. License revenues were $161.4 million, up 1% on the year.
Following the software spending shock in the second quarter, PeopleSoft co-president Phil Wilmington said the firm was now seeing a less volatile spending environment and more predictable spending patterns. While customers were not necessarily preparing to up their overall software spending, he said, they did seem more prepared to follow through on plans once they are put in place.
Nevertheless, the company was cagey on its likely performance in the current quarter. CFO Kevin Parker said the hostile Oracle bid would continue to affect its business in the fourth quarter, but it expected sequential growth in license revenues and in pro forma and GAAP earnings per share.
For the year to date, sales were up 25.8% to $1.99 billion, delivering net income of $58.8 million, compared to the previous year’s $67.7 million income.