Updated from 5:35PM

PeopleSoft

(PSFT)

is proving itself as one of those quietly assertive types that doesn't back away in the face of uncertainty.

The Pleasanton, Calif.-based enterprise software company comfortably beat analyst expectations Wednesday when it announced earnings of $36 million, or 11 cents per share, on revenue of $503 million, before reiterating its financial guidance for the second quarter and the rest of 2001.

Analysts expected PeopleSoft to show earnings of 9 cents per share on revenue of $469.9 million, according to

Multex.com

. In the year-ago period, PeopleSoft earned 4 cents per share on $375.4 million in revenue.

Software license revenue improved 70% year over year to $153 million. Analysts had expected just $143 million in license revenue.

The company also defied expectations that it would lower its projections for the rest of the year. On its conference call, PeopleSoft reiterated its financial guidance for 35% license revenue growth during 2001, and earnings of 55 to 60 cents for the year. For the second quarter, the company stuck by its previous guidance of $155 million to $160 million in license revenue, and earnings of 12 cents per share.

"We're not changing our guidance, which isn't to say we're not sober

about economic conditions," said Craig Conway, PeopleSoft's CEO, on a conference call with financial analysts. "But we feel our original guidance was conservative when we made it. We forecast

license growth of 30% to 35% at the beginning of the year, which is exactly what many of our competitors are coming down to now."

Analysts currently expect 2001 earnings of 56 cents per share, and total revenue of $2.05 billion. For the second quarter, the consensus estimate stands at 12 cents per share in earnings and $497.5 million in revenue.

In regular-session trading, PeopleSoft shares closed up one penny at $30. In after hours, they jumped to $32.90 on

Island

ECN.

"This was an in-your-face quarter," says Craig Wood, analyst with

Merrill Lynch

who rates the stock long-term accumulate. " I think it reflects a lot of confidence by the management team, and probably underscores the maturity of the product cycle."

Wall Street expected PeopleSoft to make its numbers because it was one of the few software companies not to issue a profit warning earlier this month. As far as making its numbers for the quarter, it was in rare company, along with

Siebel Systems

(SEBL)

and

SAP

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.

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But that doesn't mean it was easy for the company to do so. Unlike with other software bigwigs, such as

Microsoft

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, analysts haven't been

taking down PeopleSoft's numbers. That means PeopleSoft's results compared to estimates are real. Given the current spending environment in technology, that's no small feat.

"They're definitely one of the mavericks in the group," says Brent Thill, an analyst with

Credit Suisse First Boston

who currently rates PeopleSoft a hold. "It's a great signal for the industry that they're definitely not going to completely stall out." (His firm hasn't' done underwriting for the company.)

Analysts say that unlike

Oracle

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, which infected the software sector in March by

warning of its own shortfall, PeopleSoft doesn't rely on multiple large deals to meet its numbers. For instance, the firm has only signed two deals greater than $10 million in the last two years, according to

Merrill Lynch

. With some corporations still willing to spend a little, but not a lot at this point, PeopleSoft's average deal size of $500,000 probably helped the company during the quarter. A lower exposure to failing dot-com companies likely also shielded PeopleSoft's results.

The company did say it had to offer discounts to customers to get deals closed, a practice that is usually looked down upon in Wall Street's eyes because it cuts into profit margins. But given current spending conditions for technology, analysts didn't seem too concerned about it. CEO Conway, in an interview, said the practice is happening a lot right now.

"The bad news is, it's going on pretty consistently," says Conway. "Nobody's stupid. Customers all realize the vendors are desperate for deals to happen. The good news is the magnitude of the accommodations are less than I thought."

But while the company boldly maintained the financial guidance for the year it issued in January, it didn't do so without some hesitation. In an interview, Conway said the company's top brass was still deciding where to go with guidance until right before its conference call.

"We were discussing this as late as two hours ago," Conway says. "It was a real-time, hotly debated issue. But in the end, I feel better leaving it where it is then I would have felt taking it down or taking it up." He said while close rates on deals were being affected by the slowing economy, a bigger pipeline was helped obviate that effect.

Conway also said he felt vindicated for his firm's guidance now. In January, when PeopleSoft gave its guidance for the year, investors

shunned the stock, thinking it was too low. Now, though, PeopleSoft is sticking to its numbers, even as its competitors take them down.

Jim Pickrel, an analyst for

J.P. Morgan H&Q

who rates the stock a buy, says PeopleSoft was also insulated, relatively, from the slowest parts of the economic slowdown.

"They focus on services industries, just don't have that same exposure to manufacturing and telcos that a lot of the other software vendors do," says Pickrel. "On a relative basis, those

services sectors of the economy haven't been quite as devastated." (His firm hasn't done underwriting for the company.)

But that doesn't mean things will stay rosy going forward. Merrill's Wood comments that all PeopleSoft's good news "doesn't eliminate the overhang going forward" such as spending deferrals by companies.

But all in all, PeopleSoft quietly gave software investors something to smile about once again.