PeopleSoft Posts Record Quarter

CFO Kevin Parker of the enterprise application vendor described total, license, and service revenue for the quarter as "the highest in the company's history." For the quarter ended Dec. 31, total revenue rose 34 percent, to $685.2 million from $512.3 million a year earlier. The 2003 results include J.D. Edwards' contribution. Analyst had expected $654 million in revenue.

License revenue rose to $185.4 million, compared with $143.2 million the same quarter last year, before addition of J.D. Edwards. The company said 10 percent of its entire license revenue came from transactions that included product lines from both companies. Craig Conway, PeopleSoft's president and CEO, partly attributed results to an economy that's "returning to normal buying patterns," and to seasonally strong sales that typify the fourth fiscal quarter.

Said Conway: "2003 was not the year it could have been were it not for the hostile actions of Oracle. It was a remarkable year anyway. The fact remains we are a larger company, with higher license, maintenance and consulting revenue. I take great comfort from the comparison of our stock to our competitor's."

PeopleSoft now claims to be "the second largest software company" in the country. Oracle CEO Larry Ellison disputed that claim Wednesday while at OracleApps World in San Diego.

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In after hours trading, PeopleSoft's stock fell 83 cents, to $22.16. In comparison Oracle shares rose 5 cents, to $14.24. Oracle currently offers PeopleSoft stockholders $19.50 a share.

Quarterly net income for the Pleasanton, Calif., company fell sharply to $17.4 million, or five cents a share, compared with $57.4 million, or 18 cents a share in the year-ago quarter.

Excluding acquisition-related charges, fourth-quarter income was 20 cents a share, exceeding the company's guidance of 18 cents to 19 cents a share.

For the full year, the company reported $2.3 billion in total revenue, up from $1.9 billion in 2002. License revenue for 2003 rose to $538 milion, compared with $531 million the year earlier. Services revenue for the year was $1.7 billion, increasing from $1.4 billion a year ago. PeopleSoft finished the year with $1.4 billion in cash.

During Thursday's earnings call, Conway and Parker told financial analysts they expected 1Q 2004 license revenue to fall 25 percent to 35 percent -- a drop they described as typical in the first quarter for technology companies the size of PeopleSoft. Parker additionally revealed that the company spent $350 million in the last quarter to buy back its stock, and that PeopleSoft's board has authorized another $200 million for the next fiscal quarter. The company's buyback efforts are part of its strategy to parry Oracle's advances.