PeopleSoft results boost takeover defences

6 October 2004 PeopleSoft, the enterprise software company, has sold more software in its latest quarter than analysts had expected, boosting the company’s defences against the hostile bid from rival Oracle.


Details of the surprisingly strong performance were released to coincide with the announcement that PeopleSoft has dismissed its CEO Craig Conway.

Software license sales for the quarter, which ended 30 September, will total $155 million to $165 million, according to preliminary figures. This is roughly even with last year’s third-quarter sales of $160.5 million. In contrast, licence sales at close rival Oracle plummeted to just $69 million during its last quarter.

Total revenue for the quarter is expected to be about $680 million to $695 million, compared with $624 million in the same quarter last year.

The company also reported at the PeopleSoft Connect EMEA conference in London this week that it added more than 150 new customers during the third quarter, which accounted for almost a third of total licence revenue.

Analysts are still attempting to understand how PeopleSoft has managed to outperform its rival so spectacularly. One line of thought is that customers have accelerated their PeopleSoft purchases in order to qualify for incentives before the takeover issue is resolved this quarter.

PeopleSoft’s performance did not, however, secure the position of CEO Craig Conway. Members of PeopleSoft’s board of directors disclosed the reasons for Conway’s dismissal during a trial that began this week in Delaware, US, in which Oracle is seeking to remove PeopleSoft’s “poison pill” takeover defence.

Conway apparently incensed members of the board in September when he admitted in his deposition in the Delaware case that some remarks to Wall Street analysts “weren’t true.”

Steven Goldby, a member of PeopleSoft’s board of directors, said: “We knew that Mr. Conway had misspoken and what he had said was untrue.” According to Goldby, this was not the first infraction by the former CEO.

“Ill-advised and sometimes untrue statements by Conway and friction with other top executives caused the software company’s directors to consider his dismissal several times before firing him,” another PeopleSoft board member testified.

Despite divisions within PeopleSoft, the company hasn’t changed its public opposition to Oracle’s offer.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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