Wednesday, July 28, 2004 - PeopleSoft Profit Plummets 70%; Oracle Trial Cited - PeopleSoft Profit Plummets 70%; Oracle Trial Cited "PeopleSoft Inc. said second-quarter net income was down nearly 70% on revenue that fell short even of the preliminary results the company announced earlier this month.
The Pleasanton, Calif., software maker blamed the weak performance on the heavy media coverage of the antitrust trial over Oracle Corp.'s hostile takeover bid for the company. In turn, the results could make it harder for PeopleSoft to continue to resist Oracle's $7.7 billion offer if the deal receives legal clearance. A decision in the case -- which would still be subject to appeal -- is expected next month.
Documents disclosed in the four-week antitrust trial over Oracle's bid revealed deep discounting and doubts among PeopleSoft's executives about the company's ability to invest enough to remain competitive with Oracle and SAP AG, the leader in the market for business-software applications. Craig Conway, PeopleSoft's chief executive, said the trial "was the elephant in the room for our customers."
PeopleSoft appears to have relinquished the No. 2 spot in the business-applications market that it seized last year. The most recent quarter brought PeopleSoft's license revenue during the past 12 months to $606 million. In a roughly comparable period, Oracle's applications license revenue totaled $615 million."
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