The application software maker reported net income of $23.3 million, or 18 cents a share, for the quarter ending June 30, on revenues of $184.4 million. Wall Street had been expecting a profit of 16 cents a share, according to First Call, which tallies analysts' estimates.
PeopleSoft last year reported net income of $11.5 million, or 10 cents a share, for the second quarter on revenues of $102.7 million.
Andrew Rothskill, an analyst at Smith Barney, expected the company to make its mark.
"The great thing about PeopleSoft is that they have done a fabulous job of managing their business. Because they have deferred revenue, it understates their numbers, which means they can predict very well what their numbers will be."
He added that while PeopleSoft does not have nearly as broad a solution as SAP, it is gaining in the manufacturing and enterprise space.
"They have only recently begun to expand into manufacturing. They started in human resources, and then expanded to applications. In both of those, they dominate," Rothskill said.
Recent developments in the vertical application market have forced PeopleSoft and its competitors to branch out beyond their core strengths. As their clients increasingly specialize, software makers are adding industry-specific versions of their core business applications. For instance, instead of just selling a manufacturing application generic enough to handle any industry, applications makers are tailoring products for the oil and gas business, education, and telecommunications companies.
So it comes as no surprise that PeopleSoft cited revenues from the release of new multilanguage versions of its financial and human resource management application suites as a highlight of the quarter. Other hits for the quarter were a new public sector version of its flagship HRMS human resource software and a deal with 22 health care companies.
The company also announced today that it plans to acquire all outstanding equity interests of Campus Solutions, a developer of student administrative systems for colleges, to shore up its foothold in the education market.
Based on current expectations, the company expects revenues for the third quarter to increase about 13 percent over this quarter.