Facing a dramatic economic slowdown and an unsolicited takeover bid, Epicor Software Corp. yesterday reported mixed third-quarter financial results, with overall revenue climbing 31.7%, but earnings falling 52.6%.

Separately, Epicor announced yesterday that its board of directors unanimously rejected the unsolicited offer from private investment firm Elliott Associates to acquire the company for $528 million. In a statement, Epicor said the board believes Elliott’s $9.50-per-share offer is too low and too conditional, and the board questioned the seriousness of the offer.

“The effect of the offer’s numerous and subjective conditions is that the offer may be illusory and Epicor’s stockholders cannot be assured that Elliott Associates will consummate the offer,” Epicor said in the statement.

For the third quarter, Epicor reported total revenue of $135.8 million for the three months ended Sept. 30, compared with $103.1 million for the same period a year ago. The vendor of enterprise applications reported net earnings of $3.8 million, off from last year’s $8.1 million.

License revenue, meanwhile, dropped to $22.4 million, 7% below the $24.1 million recorded in the year-earlier period. The company, however, was able to compensate for that decline with increases in maintenance and consulting revenues. Revenue from maintenance increased 24.8% to $50.1 million, while revenue from consulting rose 27.1% to $41.6 million.

Lower profit margins on Epicor’s consulting revenue, coupled with higher operating expenses, contributed to Epicor’s lower third-quarter income. The company, for example, reported software development expenses for the quarter of $13.6 million, up 48.5% from the year-earlier period. Much of that increased expense, officials said, was related to the rollout of the company’s Epicor 9 application suite.

The rise in operating expense came despite what President and CEO Thomas Kelly described as a “minor headcount reduction” during the quarter. Overall, Epicor’s operating expenses grew 18.1% during the period.

Kelly attributed the company’s lower third-quarter license revenue to the souring global economy and, in part, to distractions caused by the Elliott takeover offer. Like rival SAP AG earlier this month, Epicor said the economic crisis caused some deals to disappear toward the end of September.

The customer mood at the end of the quarter, Kelly said in a conference call with financial analysts, was one of “great uncertainty. People deferred signing contracts in the last few days of the quarter.”

Prior to the last two weeks in September, Kelly said, Epicor’s business had been on track to surpass Q3 results across the board. “Then things landed on the desks of CEOs and CFOs, and they said, ‘We’re going to wait until next quarter’ ” to sign new software license deals, Kelly said.