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PeopleSoft posts strong Q2, awaits close of JDE deal

PeopleSoft reported strong quarterly earnings and said its J.D. Edwards acquisition should close by Thursday night. It offered details on how the combined company would operate.

As it predicted when it released preliminary earnings earlier this month, PeopleSoft Inc. has beaten original analyst expectations for its second quarter.

Results reported today show PeopleSoft posted $497.4 million in revenue, which topped analysts' revised estimates. Its earnings of 14 cents per share were in line with forecasts.

The figures show slight growth over the same quarter last year, albeit under far harsher conditions. PeopleSoft spent much of the quarter reassuring potential customers that it could fend off Oracle Corp.'s hostile takeover bid. In its earnings call, PeopleSoft said it spent $14 million in the quarter fending off Oracle.

"This is every American movie ever made," said CEO Craig Conway. "This is Gary Cooper and John Wayne. It's the big landowner trying to force the little landowner off his land."

To spur sales, PeopleSoft launched a customer assurance program in Q2 that guaranteed customers two to five times their money back if the company were acquired.

During the quarter, PeopleSoft said it added 100 new customers. It signed deals with companies like Bausch & Lomb, Circuit City Stores, Corning, Fleet National Bank, Metropolitan Life, Hewlett-Packard and Intel.

Overall, PeopleSoft said it notched 100 CRM deals the quarter, 100 for supply chain management, 150 for financials and 200 for human resources.

PeopleSoft is expected to close its acquisition of midmarket software provider J.D. Edwards & Co. tonight.

Once combined, the company plans to run three separate lines: for IBM's iSeries (AS/400) platform, the midmarket, and large enterprises. Conway said PeopleSoft products will benefit from J.D. Edwards' strength in asset management and J.D. Edwards' software will take on PeopleSoft's supplier relationship management components.

Oracle's offer for PeopleSoft expires Aug. 15. Antitrust authorities have asked Oracle to provide them with more information about the deal.

In a statement issued after the PeopleSoft earnings call, Oracle said it was still pursuing the takeover.

"We believe time is on our side. Oracle remains committed to acquiring PeopleSoft -- even with the addition of J.D. Edwards," said Jim Finn, Oracle spokesman.

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