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Updated from 5:20 p.m. EST

PeopleSoft

(PSFT)

on Wednesday announced results for the December quarter that were generally ahead of management's guidance and Wall Street expectations. But as analysts expected, revenue for the entire year dropped to $1.9 billion, compared with $2.1 billion in 2001.

The Pleasanton, Calif., enterprise software vendor said that it earned on a diluted basis 18 cents a share in the fourth quarter; analysts polled by Thomson Financial/First Call had projected 14 cents a share. Revenue for the quarter was $512 million, compared with $493.8 million a year ago, an increase of 3%.

Licensing revenue, an important measure of growth for software companies, was $143 million in the quarter, compared with company expectations of $125 million to $135 million, but still well below sales of $174.1 million in the year-ago quarter.

For the year, the company reported net earnings of 57 cents a share, compared with 59 cents in 2001. Aided by a 10% cut in operating expenses, net income for the year from recurring operations increased to a record $192 million, and earnings per share from recurring operations was 60 cents, also a record for the company, and an increase of a penny from the prior year.

Operating margins increased to 13.5% for the year, up from 11.9% in 2001, without resort to layoffs or unusual one-time items.

PeopleSoft's core business is providing application software to help manage human resources and accounting. In a conference call following the earnings announcement, CEO Craig Conway said the company had significant success expanding its reach to customer relationship management software, the core business of rival

Siebel Systems

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, and supply chain management software. But Conway declined to give numbers substantiating his claim.

Looking ahead to results for 2003, CFO Kevin Parker said he expects EPS of 13 cents to 14 cents in the first quarter (analysts are projecting 13 cents) and licensing revenue of $125 million to $135 million. The sequential drop, he said, was due to normal seasonality. PeopleSoft generally does not offer guidance on total revenue.

Saying, "We won't have clear visibility until the end of the first quarter," Parker added the company will give no full-year 2003 guidance until April.

After a losing value during the day, PeopleSoft shares gained $1.38, or 7.9%, to $18.85 in after-hours trading.