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PeopleSoft revises third-quarter profit

Oracle target adds $2.6 million to bottom line after tax adjustment related to ex-CEO's severance package.

Tech Industry
PeopleSoft revised its third-quarter earnings on Tuesday, adding $2.6 million to its profit after recalculating its tax bill for the quarter.

After the tax adjustment, PeopleSoft earned $26.6 million, or 7 cents a share, on the basis of Generally Accepted Accounting Principles. Pro forma earnings, which exclude certain charges, are unaffected by the adjustment. PeopleSoft had reported earnings that exceed targets for the quarter on Oct. 21.

The adjustment is related to taxes on a $6.4 million charge the company took during the quarter to pay for former Chief Executive Craig Conway's severance package. PeopleSoft fired Conway last month, offering him $13.7 million in salary, benefits and stock grant settlements for his early departure, according the company's latest U.S. Securities and Exchange Commission filing.

PeopleSoft has spent more than $81 million fighting a hostile takeover bid by Oracle since the launch of its buyout campaign about 17 months ago, according to the filing. In addition, liabilities related to PeopleSoft's money-back guarantee agreements with customers, also known as the "customer assurance program," reached $2.4 billion as of Sept. 30. Oracle has sought to cease the program in a lawsuit that's still pending in Delaware Chancery Court.

PeopleSoft's board is expected to respond to Oracle's latest $24-per-share offer by Monday.

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