PeopleSoft Earnings Decrease 37%

PeopleSoft Inc., the business-software maker fighting Oracle Corp.’s hostile takeover bid, said earnings fell 37% as costs grew faster than sales. The company’s shares declined as much as 7%.

Net income fell to $24.2 million, or 7 cents a share, from $38.5 million, or 12 cents, a year earlier, the company said. Sales rose 40% to $643.1 million from $460.3 million, outpaced by a 49% increase in expenses.

Costs for sales and product development rose for the second quarter in a row as part of PeopleSoft’s continued consolidation of J.D. Edwards & Co. The Pleasanton, Calif.-based company had $8.23 million in expenses for items such as the acquisition. Analysts are concerned the deal masks declines in PeopleSoft’s underlying business amid challenges by larger rivals.

License revenue, a key measure of new business, rose to $130.9 million in the quarter from $80.8 million. That compares with the combined $124.4 million PeopleSoft and J.D. Edwards reported in the comparable period a year earlier.

PeopleSoft shares fell as much as $1.34 to $17.55 in extended trading after the report. They rose 73 cents to $18.89 in regular Nasdaq trading.