PeopleSoft Inc, fresh from firing its chief executive amid a hostile take-over bid from Oracle Corp on Monday said quarterly revenue would exceed Wall Street's expectations, helped by an increase in customers making larger orders for its business software.
The forecast followed Friday's surprise announcement that the company had ousted Chief Executive Craig Conway, a move that sparked speculation that PeopleSoft was now more likely to reach a deal to be acquired by rival Oracle at a higher price.
"Overall, going into last Friday everybody was anticipating a huge miss from PeopleSoft, so the top line is definitely stronger than everyone had anticipated and the bottom line is pretty much in line," American Technology Research stock analyst Donovan Gow said of the third-quarter forecast.
Oracle will be even more likely now to increase its bid, Gow said. But, he said, instead of making a deal more likely, the generally upbeat quarterly forecast may give PeopleSoft more ammunition to argue to its shareholders that it is holding its business together well despite Oracle's $7.7 billion hostile take-over attempt.
PeopleSoft shares fell more than 3 percent in early trading. Oracle stock rose 2 percent.
"This gives PeopleSoft the ammo to continue fighting the take-over attempt," said Gow, who rates PeopleSoft stock a "hold". "If that's the case, and they can resist a take-over attempt, then there is actually going to be downside in the stock because it's trading more on the bid dynamics than it is on its fundamentals."
PeopleSoft shares jumped about 15 percent on Friday, past Oracle's $21-per-share offer.
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