PeopleSoft Thursday said it expects to realize cost-cutting synergies in the range of $167 to $207 million in 2004 en route to posting total revenues of $2.8 to $2.9 billion.
The Pleasanton, Calif. applications company, factoring in its newly-closed J.D. Edwards purchase for the first time, also discussed its combined product roadmap integration between the two entities.
Kevin Parker, executive vice president and CFO at PeopleSoft, provided detailed guidance for the last two quarters of 2003 and all of 2004, which includes plans to cut 750 to 1,000 jobs.
Current headcount of the combined entities is currently 13,000, but Parker said the outfit is looking to trim some 7 percent of redundant jobs in accounting, marketing and middle management.
Parker said PeopleSoft expects to post sales figures for new software in 2004 of $700 to $715 million. The company is banking on earnings-per-share of 85 to 90 cents for 2004.
Parker also revised revenues in the range of $575 to $590 million for Q3 2003 and sales in the ball park of $615 to $630 million for Q4 2003, with total licensed revenues of $500 million, total revenues of $2.145 to 2.175 billion and an EPS of 52 to 55 cents for the whole year.
The Pleasanton, Calif. company revealed the details as Oracle , which reiterated its $7.5 billion offer for PeopleSoft at a “town hall
meeting,” Wednesday, waits in the wings as its proposal is scrutinized by
federal regulators.
Executive Vice President of Products and Technology Ram Gupta then outlined product integration plans, including some rebranding, as well as maneuvers to “leverage intellectual capital.”
Gupta said PeopleSoft expects to integrate certain products across their lines over the next one to six months en route to rebranding the software into three distinct categories.
Representing small, medium and large business targets, they are PeopleSoft World, an AS/400 line that includes J.D. Edwards’ World portfolio, PeopleSoft Enterprise One, which includes J.D. Edwards’ mid-market applications, and finally PeopleSoft Enterprise.
“We will transfer intellecutal property and domain expertise from to the next,” Gupta said.
Gupta said PeopleSoft will integrate J.D. Edwards’ manufacturing, distribution
real estate and asset management application suites, considered the Denver
company’s strengths, into its own portfolio.
Conversely, PeopleSoft will take its strong point — human capital management
applications, supply resource management and finance applications — and move their functionality down to the mid-market, which J.D. Edwards serves.
Ultimately, PeopleSoft customers would benefit from better
real estate and manufacturing software at the high-end, while J.D. Edwards
customers will enjoy the greater functionality of PeopleSoft’s human
resource applications, Gupta said.
All of these integrations, Gupta said, will prove to be extremely competitive with point solution providers.
Gupta, who promised PeopleSoft would support IBM and BEA middleware according to customer choice, wrapped up his presentation by claiming it was hard to imagine how PeopleSoft could lose a contract in a competitive situation.
An analyst familiar with PeopleSoft’s plans said any overlaps between the companies will likely mean that J.D. Edwards applications that have similar functionality and purpose to those offered by PeopleSoft will be put on “life support.”
Some of these soon-to-be-redundant features include integration tools and portal analytics, both of which the source said are stronger in PeopleSoft. There are also likely to be complementary products from J.D. Edwards, which will likely be integrated and recoded.
PeopleSoft will provide additional product news at a news event September 15.
PeopleSoft Airs Plans for J.D. Edwards
