PeopleSoft slashes earnings forecast

The software maker blames Oracle's hostile takeover bid for the shift, saying the trial publicity was "impossible to completely overcome."

Reuters

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Aug. 6, 2004 5:00 a.m. PT

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PeopleSoft on Wednesday slashed its second-quarter earnings forecast by a big margin, saying a hostile takeover bid by Oracle against the company has significantly affected its business.

The warning came less than a week after the close of a monthlong antitrust trial that will determine whether Oracle's $7.7 billion bid for PeopleSoft can move forward. It also came on the heels of a spate of profit warnings from other software makers, including Veritas Software and JDA Software Group.

PeopleSoft said it now expects earnings per share of 13 cents to 15 cents, excluding certain items. Previously it had forecast earnings of 20 cents to 22 cents per share. Analysts on average had expected earnings of 21 cents per share, according to Reuters Estimates.

Including items such as 2 cents per share Oracle costs, amortization and restructuring charges, PeopleSoft sees net income of 5 cents per share, lower than its April forecast of 10 cents to 12 cents per share. Analysts on average had expected 12 cents per share on that basis.

"The extensive publicity of the antitrust trial during the last month of our quarter was impossible to completely overcome," Chief Executive Craig Conway said in a statement. "We believe the adverse impact to our business has been substantial, with even greater impact this past month."

Conway added the company look forward to returning to normal business soon and recovering these damages.

PeopleSoft shares closed Tuesday at $16.82 on Nasdaq. Its profit warning dragged Nasdaq futures lower in early electronic trading Wednesday morning.