Analysts See PeopleSoft Easily Besting Last Year -- but by How Much? - TheStreet

Investors so far like PeopleSoft's (PSFT) move into software that helps companies manage relationships with their customers. Tuesday they'll get to see if the company is continuing that progress.

PeopleSoft is expected to report its third-quarter results after the close of regular trading Tuesday. Almost no one believes PeopleSoft will have a hard time beating its year-earlier results, as 1999's third quarter was slow because companies cut back spending before Y2K. Analysts polled by

First Call/Thomson Financial

expect the company will report income of 7 cents a share, up from 2 cents a share a year earlier.

So instead investors will focus on the company's continued progress -- or lack thereof -- in pushing into the so-called customer relationship management software business. Customer relationship management software, which is used by a company's sales and customer service representatives to help them communicate and keep track of customer accounts, is the hot area in corporate software.

PeopleSoft's focus on this sector has helped drive its stock up -- it's climbed more than 180% since mid-May.

PeopleSoft's main business, enterprise resource planning, which involves things like human resources and accounting programs, is a sector that grows around 15% a year. But the explosive customer relationship management sector grows 40% to 50% a year, says Thomas Berquist, an analyst at

Goldman Sachs

. (Goldman hasn't done any recent underwriting for PeopleSoft.)

"We're looking for continued revenue traction with CRM," says Berquist.

In particular, analysts want to see any news of improved license revenue from

Vantive/PeopleSoft

, the division created by the company's January purchase of ailing CRM player

Vantive

. PeopleSoft bought the company to extend its presence in the management arena, and now investors want to see results.

The company also is likely to offer news on its new Internet-based software,

PeopleSoft 8

, which was released last month. Management will likely describe customer reactions to its heavily promoted supply chain, human resource management and finance software.