PeopleSoft Inc delivered on its earlier promise of poor first- quarter results, with the Pleasanton, California-based ERP software vendor showing a net loss of $171.5m after recording hefty charges. Revenue for the quarter was up 10% on a year-over- year basis at $305.4m – a major drop from the 20% to 30% revenue growth the company had been hoping to see this year. Excluding the $180.8m in one-time items taken for the formation of Momentum Business Applications Inc and its recently-completed restructuring, net income for the quarter was $7.6m, or $0.03 per share. That represents a 78% drop, on a pro forma basis, from the corresponding quarter last year, when net income was $33.8m, or $0.13 per share.
Those numbers are actually a penny better than the First Call consensus of $0.02, which was revised down from an earlier expectation of $0.07 after the company issued a profit warning on March 31. At that time, the company insisted that its problems are not unique and simply represent the current environment in the enterprise application software industry as a whole, with a general slowdown in software license sales due to Y2K concerns.
Management insists, however, that it sees no evidence of any decline in its competitive health, claiming that even though customers may be dragging their feet, PeopleSoft’s win rate against competitors is largely unchanged. Revenues from license fees for the first quarter amounted to $76.6m, down 44% from the year-ago quarter’s $136.9m. Services revenue helped avoid total disaster by climbing 62% to $228.3m and accounting for 75% of total revenue, compared to 51% a year ago. Revenues from international operations also rose 31% to $54.1m, or 18% of the total.
