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PeopleSoft foresees earnings strength

The software maker and Oracle acquisition target says it will surpass its earnings expectations, according to preliminary results for the quarter ended June 30.

PeopleSoft on Wednesday announced that it will surpass its earnings expectations, according to preliminary results for the quarter that ended June 30.

The business software maker said it expects earnings per share from recurring operations to be between 13 cents and 14 cents, up from its original guidance of 11 cents to 12 cents per share. The company also expects earnings per share that include previously announced nonrecurring items to be between 10 cents and 11 cents, compared with earlier guidance of 8 cent to 9 cents.

PeopleSoft said that based on preliminary information, its licensing revenue is expected to be between $105 million and $115 million, with total revenue coming in at between $490 million and $500 million.

Companies tend to tout their preliminary results either to emphasize their strength or to take the edge off news of weak returns. PeopleSoft's announcement may be an effort to instill confidence among clients about the company and its products against the backdrop of a hostile takeover bid from Oracle.

"In an undeniable vote of confidence, both existing customers and new customers continued to select PeopleSoft for their enterprise software applications," PeopleSoft CEO Craig Conway said in a statement. "They continued to choose PeopleSoft for our stronger products and better architecture."

Oracle last month surprised the software industry with a $5.1 billion offer for PeopleSoft, just days after PeopleSoft itself had announced plans to acquire J.D. Edwards for $1.7 billion. Oracle has since upped its offer to $6.3 billion and hinted that it may yet again increase the offer. PeopleSoft and Oracle compete in the market for broad-based business applications, an area in which Oracle has had little success building on its commanding lead in database software.

Earlier this week, PeopleSoft urged its shareholders to not accept Oracle's bid for the enterprise software maker, saying it was against their best interests.

On Wednesday, Oracle dismissed the uptick in PeopleSoft's revenue expectations as sleight of hand.

"PeopleSoft's claims to have beaten analyst expectations are hardly surprising, since by their own admission over half of their new license revenue resulted not from ordinary course sustainable business but from one-time gimmicks such as two to five times money-back guarantees, favors from business partners, and other tactics from a company desperate to put up numbers for a single quarter," said Jim Finn, Oracle spokesman, in a statement. "We believe that five straight quarters of declining results are a better indication of the underlying condition of PeopleSoft's business."

PeopleSoft's final results will be released in greater detail later this month, the company said.

CNET's Dawn Kawamoto contributed to this report.