The company, whose products help companies manage human resources, payroll and other functions, said net income rose 54 per cent to $44.2 million, or 17 cents a diluted share, from $28.7 million, or 11 cents, in the year-ago quarter.

The result was in line with the consensus analyst forecast, according to First Call Corp., which tracks Wall Street predictions.

Revenue rose 62 per cent to $351.3 million from $217.1 million. Licensing revenue, closely watched by investors and analysts, rose 30 per cent to $147.3 million from $113.0 million.

"License revenue growth slowed a bit faster than I was looking for," Rob Kugel, an analyst at First Albany Corp., said, adding that two months ago his forecast was for an increase of 35 per cent to 40 per cent.

Uncertainty in the global economy has made executives increasinglywary about spending aggressively on applications software, analysts said. In addition, the market is maturing while competition is stiffening among the largest players.

"The market has been getting increasingly saturated, and it's harder to get the growth that was once there," Kugel said.

In the first quarter of 1997, for example, licensing revenue rose 90 per cent from the year-ago period. PeopleSoft, based in Pleasanton, California, also warned in July that profits for the next several quarters would be hurt by a slowdown in sales of software that runs on powerful mainframe computers.

Increasing competition from No. 1 applications software maker SAP AG of Germany, Baan Co. NV of the Netherlands and database software company Oracle Corp. have also played a role, analysts said.

Even so, PeopleSoft chief financial officer Ron Codd said in an interview he was pleased with the company's third-quarter performance, particularly with license revenue growth.

"We're in an environment in which most of ourcompetitors are reporting, in fact, slower growth, so we're pleased with it from that perspective," Codd said. "PeopleSoft continues to grow at or above the market growth rate."

Revenue and profit growth in the software business has also been slowing as companies spend more on getting their computers ready for the Year 2000 and less on buying products from PeopleSoft and others.

PeopleSoft said it saw revenue in 1998 rising about 60 per cent from the $815.7 million it had in 1997. That compares with 81 per cent growth a year earlier. It forecast 1999 revenue would be about 25 per cent to 30 per cent above what it will record this year.

"With the current situation of uncertainty in the world economy, it's hard to be overly optimistic," analyst Kugel said, who rates PeopleSoft stock a "buy."

The Gartner Group market research firm is forecasting revenue growth in the applications software industry will rise at a compound annual growth rate of 24 per cent in the next five years.

PeopleSoft stock tumbledby nearly a third to $18.50, its lowest level in more than a year, on October 2 amid concern that sales will slow and that intense competition from SAP will hurt profits.