PeopleSoft’s Sales Jump but Profit Falls

PeopleSoft Inc., a business software maker that is fighting Oracle Corp.’s hostile acquisition bid, said Thursday that its fourth-quarter profit fell as costs rose 52%, dwarfing a 34% sales increase.

Net income fell 70% to $17.4 million, or 5 cents a share, from $57.4 million, or 18 cents, a year earlier. Sales rose to $685.2 million from $512.3 million.

PeopleSoft’s sales were boosted by a recovery in demand for business software and by the company’s acquistion in August of J.D. Edwards & Co., which sells programs for accounting and customer service.

Costs for sales, marketing and product development increased as the company spent more to win new customers.

Excluding some costs, Pleasanton, Calif.-based PeopleSoft said its quarterly profit would have been 20 cents a share, matching the average estimate of 34 analysts surveyed by Thomson Financial. Sales beat the analysts’ forecast of $654 million.

Some investors may have expected the company to exceed the profit estimate, said Brendan Barnicle, an analyst at Pacific Crest Securities.

PeopleSoft shares fell as much as $1.37 to $21.62 in late trading after the earnings were released. Before the release, it fell 4 cents to $22.99 on Nasdaq.

PeopleSoft stock has gained less than 1% this month after rising 25% in 2003.

Regarding the current quarter, the company said it would have sales of $625 million to $635 million, below analysts’ estimates of $645.8 million, and net income of 6 cents to 7 cents a share. Excluding some costs, profit will be 17 cents or 18 cents a share, Chief Financial Officer Kevin Parker said on a conference call. Analysts polled by Thomson Financial expected profit of 18 cents a share.