Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : PSFT - 1999: The "Make-It-or-Break-It" Year? -- Ignore unavailable to you. Want to Upgrade?

To: SemiBull who wrote (1243)	7/2/2003 7:28:35 PM
From: SemiBull	Read Replies (2) \| Respond to of 1274

PeopleSoft's Rosy Outlook Stuns Wall St. Wednesday July 2, 5:51 pm ET By Eric Auchard and Lisa Baertlein NEW YORK/PALO ALTO, Calif. (Reuters) - PeopleSoft Inc. (NasdaqNM:PSFT - News) raised its second-quarter revenue and profit forecasts on Wednesday, countering fears that Oracle Corp.'s (NasdaqNM:ORCL - News) hostile takeover bid for the business software maker had weakened sales. The move surprised Wall Street and bolstered PeopleSoft's campaign to stay independent, but Oracle quickly derided what it called "gimmicks" from a "desperate" company. PeopleSoft's new forecasts could make it harder for Oracle's bid to succeed, said David Hilal, an analyst with broker Friedman, Billings, Ramsey. "It hurts Oracle's argument to shareholders that the company needs someone to save them," Hilal said. The higher sales stem largely from a novel anti-takeover defense in which PeopleSoft's customers stand to receive up to five times the value of any software purchased if the company is acquired. PeopleSoft Chief Financial Officer Kevin Parker told a conference call with investors that more than half of the $105 million to $115 million it expects in second-quarter software license sales would come from contracts tied to the promotion. Oracle spokesman Jim Finn said in a statement that the results were delivered via "one-time gimmicks ... favors from business partners, and other tactics from a company desperate to put up numbers for a single quarter." Oracle has argued that shareholders would benefit from the takeover since sales of PeopleSoft software have been declining for several quarters. PeopleSoft, based in Pleasanton, California, said early on Wednesday it expects revenue of $490 million to $500 million, based on preliminary data, up from a range of $450 million to $460 million it forecast in April. The average estimate of analysts surveyed by Thomson First Call (News - Websites) was for revenue of $443.2 million, and some analysts had been expecting the company to slash forecasts. "All I can say is 'Wow,"' Lehman Brothers analyst Neil Herman said. Many Wall Street analysts had braced for software license sales -- a closely watched indicator of future revenue potential -- to fall beneath the $80 million PeopleSoft reported in the first quarter. Merrill Lynch analyst Jason Maynard cautioned that PeopleSoft may have sacrificed future sales in favor of boosting second-quarter results. "It's unlikely that this strength in conversion rates will continue in the coming quarters," he said of the sudden spike in customer purchases. PeopleSoft said earnings, including previously announced charges of 3 cents per share, would range from 10 cents to 11 cents per share, up from a previous forecast of 8 cents to 9 cents per share. PeopleSoft stock -- which has traded in a limited range on uncertainty over Oracle's bid for PeopleSoft and a separate, friendly bid by PeopleSoft for J.D. Edwards & Co. (NasdaqNM:JDEC - News) -- closed 19 cents higher at $17.98 on the Nasdaq. The contract provision could make it far more expensive for Oracle to acquire PeopleSoft, as a successful takeover could trigger hundreds of millions of dollars in additional liabilities. If PeopleSoft remains independent, the plan has no effect. "This program does not result in an obligation by PeopleSoft," Parker said, adding that the promotion ended June 30 but could be extended. PeopleSoft sells business planning software used by companies and government agencies to manage key operations. It is best known for its human resources management software.