Pacific Growth downgraded PeopleSoft (PSFT ) to underweight from equal-weight.
Analyst Pat Mason says he's downgrading on a licensing revenue miss. He says the first quarter licensing revenue of $80.8 million is below his $82.5 million estimate, and says the second quarter licensing revenue guidance of $85 million to $95 million is far below his $106.1 million estimate. Mason says the shortfall may reflect more fundamental issues than just a weak economy, such as poor sales execution, and customers' reluctance to upgrade to PeopleSoft 8.0.
Meanwhile, Mason finds earnings per share guidance more palatable. He says PeopleSoft sees 11 cents to 12 cents second quarter earnings per share on $450 million to $465 million total revenue, and 52 cents to 54 cents in 2003 earnings per share on $1.9 billion in revenue. He trimmed the 12 cents second quarter earnings per share estimate to 11 cents, and cut the 54 cents 2003 estimate to 52 cents.