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Strained from fighting Oracle's hostile takeover bid, the business software maker warns that Q2 results will disappoint.
PeopleSoft
"Although we have been able to meet or exceed our financial projections
since Oracle launched their hostile tender offer more than a year ago, the
extensive publicity of the antitrust trial during the last month of our
quarter was impossible to completely overcome," Craig Conway, PeopleSoft
president and CEO, said in a statement.
Analysts expected a profit of approximately 21 cents per share on revenue of $691.5
million. The business software maker now expects earnings of 13 cents to 15
cents per share on revenue of $655 million to $664 million. Official second-quarter results are due July 27.
The earnings warning comes shortly after testimony concluded in the
Department of Justice's legal case against Oracle. The government sued to
block Oracle's bid to take over PeopleSoft's assets and customer contracts,
saying the $7.7 billion deal would limit choice and sew uncertainty in the
enterprise resource planning (ERP) market.
Conway said the evidence presented at the trial "clearly displayed Oracle's
intent to disrupt our business and damage PeopleSoft." He called the impact
on the company's business "substantial," especially as the trial grabbed
headlines last month.
Lawyers for Oracle and the DoJ will file their Proposed Findings of Fact and
Proposed Conclusions of Law tomorrow, and their post-trial briefs on July
12. Closing arguments are scheduled for July 20.
A spokeswoman for Oracle was not immediately available to comment.
In a research note to investors, SG Cowen & Co. said that PeopleSoft's poor
preliminary results, as well as other warnings from other software
companies, show that business slowed in June. Entrust
"We believe that some of this is a market-share shift that is benefiting
Microsoft
As a result of PeopleSoft's warning, SG Cowen lowered its 2004 and 2005
earnings estimates for the company. In morning trading, the company's stock
had slumped about 5 percent on the news. warned that it will miss second-quarter
financial targets, citing the strain of fighting off Oracle's
hostile takeover bid.
, JDA Software Group
, Micromuse
, Sybase
and VERITAS
are among several applications makers that
issued
earnings warnings.
and SAP
, among others," the
analysts wrote in a note to investors this morning.