ERP Vendors Post Solid ResultsERP Vendors Post Solid Results

Earnings reports from some enterprise resource planning vendors indicate that even with the tough economy, many companies continue to spend on core business applications.

SAP's report was surprisingly strong and helped boost the rest of the stock market Thursday. The German company's third-quarter net income was $198.4 million, or about 63 cents a share, and beat many analysts' expectations of about $145 million. For the same quarter last year, SAP's net income was about $36 million. The company's sales came in at about $1.65 billion, up from just over $1.6 billion last year.

PeopleSoft Inc. also beat analysts' estimates. Its third-quarter net income was $44.6 million, or 14 cents a share, down from last year's third-quarter net income of $50.3 million. Still, many analysts were expecting earnings of about 13 cents a share. Revenue was $1.2 billion, compared with $1.5 billion last year. Even with the drop in revenue and earnings, the company considers its performance a success in light of the overall drop in technology spending. "PeopleSoft continues to deliver strong financial results at a time when many companies are struggling," CEO Craig Conway said in a prepared statement.

ERP vendor i2 Technologies Inc. didn't fare as well but is slowing the flow of red ink. The company's net loss for its third quarter was $199.1 million, compared with a loss of $5.5 billion in last year's third quarter--a figure that included a $4.7 billion write-off related to several acquisitions. Revenue was $114.6 million, compared with $201.1 million in the year-ago quarter. "While there is still much work to be done to complete our turnaround, I am encouraged by the orders we received and the operational progress we made in the third quarter," i2 chairman and CEO Sanjiv Sidhu said in a statement.

Joshua Greenbaum, principal at Enterprise Applications Consulting, says SAP and PeopleSoft benefit from having a wide customer base and a broad range of products. "In a down market, you spend your time selling new functionality to existing customers," rather than focusing on getting new business, Greenbaum says. Plus, many of those existing clients likely got "very favorable deals" in the quarter from PeopleSoft and SAP, he says. I2 suffers, he adds, because it hasn't built up the customer or product base of the other two.