PeopleSoft 'Guaranteed' Its Quarter

One thing the company didn't do, said Parker, was offer unusual discounts or special rebates.

Parker did say that that conversion rates (sales leads actually closed) in the quarter were up, a move that could signal a more general recovery in IT spending.

Despite the good news, PeopleSoft execs made no attempt to hide their anger at Oracle. They said the takeover attempt was bad for PeopleSoft, its customers, other software companies and even bad for Oracle. "Oracle's brand has suffered significant damage," said Conway. The only beneficiary, said Conway "may be SAP," which is expected to gain customers turned off by the M&A battle.

Many analysts believed that the hostile Oracle bid was shaking customers' belief that the company would be able to follow through in implementing large software packages. And indeed, Conway acknowledged that some customers had defected, while others put off deals to wait for the smoke to clear.

"We will ask Oracle for redress," he said, apparently hinting at additional legal action against the database giant.

How the news will affect the takeover isn't clear, especially in the absence of a strong upward move in PeopleSoft's stock. Still, an increase in the bid to about $22 wouldn't be unexpected, said several analysts.

Oracle's latest cash bid for PeopleSoft is valued at $19.50 a share, or about $6.3 billion, while PeopleSoft's friendly offer to J.D. Edwards (JDEC) is valued at $1.75 billion in cash and stock. On Monday, the Department of Justice notified Oracle that it needs more information before it can rule on the legality of the proposed takeover. It's not clear how long the DOJ request will delay a possible merger (which is also being challenged in court), but it's likely to be at least several months.

PeopleSoft has not yet set a date to announce second-quarter earnings, but typically the company releases financial results after the market closes on a Wednesday or Thursday during the third week of July.

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