Number-two business software vendor, PeopleSoft Inc, posted a slim profit in its third quarter to pip analysts’ projections by a penny but earnings slumped dramatically on the year-ago period amid what the firm called a brutal market. Net income fell away more than 88% to $5.2m, or 2 cents a share, from $4.2m, or 17 […]
Number-two business software vendor, PeopleSoft Inc, posted a slim profit in its third quarter to pip analysts’ projections by a penny but earnings slumped dramatically on the year-ago period amid what the firm called a brutal market. Net income fell away more than 88% to $5.2m, or 2 cents a share, from $4.2m, or 17 cents a share, a year earlier on revenue down almost 14% to $303m. Sales of the firm’s business management software for the three-month period to September 30, plummeted almost 67% on the year-ago quarter with firms locking down orders to contend with Y2K compliance.
It’s been a brutal year for anyone selling enterprise transaction software, said PeopleSoft chief executive officer, Craig Conway. He predicted that an order backlog … to upgrade the enterprise backbone would show early in 2000 and be early, modest, growing and across the board. The firm rebutted suggestions that the large corporate market in which it has specialized, offers diminishing returns due to existing saturation-level use of ERP software.
The Pleasanton, California-based company reported increased services revenue up almost 17% to $245.7m. A spokesman said the firm had aggressively seized contracts to integrate its own software during the quarter, something it has traditionally sub- contracted to service partners. The firm also said its PeopleSoft 8.0 software e-commerce product designed to engineer access to e- commerce applications over the internet and corporate intranets would hit the market by the middle of next year. Executives said the product tapped a market for back office enterprise software which has shown between 10% and 35% annual growth since 1989. A spokesperson said PeopleSoft would announce a major push to snatch a share of the nascent applications service provider market before the end of the year.
The firm has had more than 40% wiped off its share price in the last year, twice having to warn the market of disappointing earnings amid stiffening competition and slowing sales. At the close of trading yesterday, before the earnings announcement, the firm’s shares stood at $15.
On October 11, the company unveiled a $420m stock deal to acquire front-office customer relationship management software vendor, Vantive Corp. A spokesperson said the acquisition would allow the firm to offer a front-to-back office software suite for e- commerce customer management. á