3 April 2002 Enterprise applications software vendor PeopleSoft has issued a revenue and profits warning for its first quarter. The warning follows a strong performance in 2001, in stark contrast to competitors such as Oracle.
The Pleasanton, California-based company said that its licence revenue for the first quarter of 2002 would be between $130 million (€147.9m) and $135 million (€153.6m), compared with earlier estimates of $160 million (€182m). The announcement caused PeopleSoft stock to plunge by a third.
PeopleSoft’s warning follows on from one issued by database and applications software vendor Oracle last month. It reported a revenue fall of 16.6% to $2.23 billion (€2.54bn) for its fiscal third quarter ending in February. That compared to revenues of $2.67 billion (€3.04bn) in the same period a year earlier.
PeopleSoft’s revenue fall is significant because the company bucked the downward trend in 2001 with a 19% growth in revenue and a 31% increase in net income. PeopleSoft’s warning has raised fears that major companies are still not buying software. This may effect the financial results of other enterprise applications vendors.
Indeed, Microsoft shares fell 5% and the shares of customer relationship management (CRM) software vendor Siebel also fell by a similar amount after Goldman Sachs financial analyst Rick Sherlund reduced his estimates for both companies in the wake of PeopleSoft’s announcement.
A number of other software companies have also issued profit and revenue warnings in the last week, including: business-to-business software vendor Commerce One; content management software vendor Interwoven; ecommerce software vendor BroadVision; CRM software vendor E.piphany; supply chain software vendor i2; and integration software supplier Vitria.
All blamed uncertainty in corporate IT spending as the reason behind their reduced first quarter estimates.