Shares of

Siebel Systems

(SEBL)

were climbing Thursday, a day after the company topped Wall Street's earnings estimates and expressed optimism about the coming year.

Around midday, Siebel was trading up $2.59, or 7.4%, to $37.39. After the close Wednesday, the software maker reported earnings of $65.9 million, or 13 cents a share, in its fourth quarter, compared with $105.9 million, or 15 cents a share, a year earlier, including acquisition charges. Siebel also said revenue fell to $481.4 million from $581.6 million in the same period a year ago. Revenue from license fees for the fourth quarter totaled $250.2 million, down from $365.1 million last year.

The company said it aggressively reduced costs in the quarter, including cutting 420 jobs, lowering discretionary spending and freezing executive bonuses.

In October, Siebel said it was looking for total revenue of $425 million to $500 million, with licensing revenue of $220 million and $300 million. The company also said it expected earnings of 9 cents to 14 cents a share. Analysts polled by Thomson Financial/First Call had been calling for earnings of 9 cents on revenue of $440.3 million.

"What we're seeing is a return to more normal business processes and buying behavior," CEO Thomas Siebel said during a conference call. "We're quite optimistic about 2002 based on what we're seeing."

Siebel said it expects first-quarter license revenue to be comparable to the fourth quarter. For 2002, the company forecast that license revenue would rise 15%. The company expects service revenue to remain flat this year with operating margins at 23% by the end of the year.

Siebel's stock has nearly tripled since hitting a 52-week low in October and is up 25% since the start of the year.

Mixed Messages

Other software issues have rallied sharply since the new year started, with

Compuware

(CPWR)

up 12%,

SAP

(SAP) - Get Report

TheStreet Recommends

higher by 13% and

Computer Associates

(CA) - Get Report

ahead by 7% as investors bet on a turnaround in information technology spending early this year. (

TheStreet.com

examined the results of these companies in a separate story Wednesday.)

In recent trading, Compuware and SAP were each losing 0.3%, but Computer Associates was trading up 1% at $38.35.

"There's been a lot of anticipation that there will be a recovery in the first half, rather than the second half of

2002 or 2003," said Nathan Schneiderman, an analyst at Wedbush Morgan Securities. "But we've been receiving very mixed messages."

While Compuware, Computer Associates and SAP pleased investors with their assessments of the economy Wednesday, other outfits like

Microsoft

(MSFT) - Get Report

have issued more cautious outlooks.

"Near term, there's nothing to get excited about," Schneiderman said. "The sharp move up is pretty much gone, and people are waiting to see proof of a turnaround."

Cameron Steele, an analyst at RBC Capital Markets, agreed that there are a lot of "positive expectations built into stocks" right now and that the outlook for software firms isn't clear.

"We expect no growth from Siebel in 2002, but SAP said this morning it is looking for 15% year-on-year growth," he said. Still, he added that Siebel faces tougher comparisons to last year than does SAP. "It may sound cliche, but this is going to be a stock-pickers' market because growth is going to be hard to come by."