Tech Firm Exceeds Forecasts

PeopleSoft Inc., the target of a contentious buyout bid from Oracle Corp., on Thursday said a jump in sales of licenses for its business software boosted revenue and profit in the third quarter.

Pleasanton, Calif.-based PeopleSoft posted net income of $24 million, or 6 cents a share, on $699 million in revenue. The results reversed a $7.3-million loss on $624 million in sales the same quarter last year.

License sales, which analysts monitor closely because they drive service and maintenance revenue, totaled $161 million -- largely flat from $160 million a year earlier, but up 24% from the prior quarter.

Without special charges related to PeopleSoft’s recent acquisition of business software firm J.D. Edwards & Co., net income was $62 million.

Analysts had expected earnings before charges of $58 million and sales of $686.5 million, according to Thomson First Call.

Some analysts said the better-than-expected results buttressed the company’s argument that Oracle’s offer of $7.7 billion, or $21 a share, was inadequate.

PeopleSoft shares, which gained 23 cents to $20.43 in regular Nasdaq trading, rose as high as $20.50 in extended trading after the earnings release.

PeopleSoft’s stock is “trading solely on the dynamics of the Oracle bid,” said Donovan Gow, an analyst with American Technology Research, which neither does business with Oracle or PeopleSoft nor owns their shares. “They’re certainly not trading on the financial fundamentals of the company.”

Oracle executives in recent weeks said they were unlikely to raise their bid. Jeff Henley, chairman of the Redwood City, Calif., software company, this week said a higher offer would be “fantasy,” echoing statements made earlier by Oracle Chief Executive Larry Ellison. Their comments helped erode PeopleSoft’s stock price more than 10% since Oct. 5, Gow said.