Restructuring Takes Toll On PeopleSoft's Profits

Enterprise software maker PeopleSoft Inc. reported Thursday that revenue grew 40% to $643.1 million in its first quarter, up from $460.3 million in the same period a year ago. But earnings dropped 37% because of restructuring and other charges relating to its acquisition of J.D. Edwards & Co., pushing net income down to $24.2 million from $38.5 million a year ago.

Excluding about $38.2 million in restructuring charges, PeopleSoft said its net income was $62.4 million. License revenue was $130.8 million, up from $80.8 million the same time a year ago.

PeopleSoft continues to fend off Oracle's $9.4 billion hostile takeover bid, a battle PeopleSoft executives said has cost about $55 million since the takeover began last spring. In a conference call announcing first-quarter earnings, the company said it expects to spend another $10 million to $12 million defending against Oracle's bid.

PeopleSoft president and CEO Craig Conway said Oracle's latest appeal of the Justice Department's decision to block the acquisition continues to have an impact on the company's revenue. "We don't have the use of both arms," Conway said. Still, he added, PeopleSoft is very enthusiastic about its business. "We hope the remaining distractions will be fully resolved" in the second quarter, he said, "and PeopleSoft will have full use of both arms."