Updated from 4:50 p.m. EDT

Despite a 10% drop in revenue, E.piphany ( EPNY) narrowed its net loss and topped analysts' estimates.

The customer relationship management software maker lost $4.2 million, or 6 cents a share, on $20.23 million in revenue in the first quarter. In the same period last year, E.piphany lost $10.90 million, or 15 cents a share, on revenue of $22.51 million.

Excluding restructuring costs and certain noncash charges, the company would have lost $2.9 million, or 4 cents a share.

Analysts surveyed by Thomson First Call were expecting the company to lose 5 cents a share on $20.40 million. Earlier this month, E.piphany warned that analysts' then-current estimates were too high. The company said that it expected to lose about 7 cents a share, under generally accepted accounting principles, on about $20 million in revenue.

The company warned that its second quarter will probably fall below analysts' estimates as well. E.piphany expects to post a loss in the current period ranging from 3 cents to 7 cents a share on total revenue of between $19 million and $22 million. The midpoint of those ranges -- a 5-cent-a-share loss on $20.5 million in revenue -- compares unfavorably with Wall Street's current estimate of a 3-cent-a-share loss on $22.71 million in revenue.

In after-hours trading, E.piphany's stock recently traded off 42 cents, or 7.6%, to $5.09. The company's stock closed the regular session off 3 cents to $5.51 per share.

"We had a very tough first quarter," said company CEO Karen Richardson on a conference call with analysts and investors. "I don't like the pace of activity in the early second quarter . It's been slow for my tastes. That's reflected in our guidance."

Company officials declined to provide guidance for the second half of this year.

"The environment still feels very cautious and difficult to read," Richardson said.

E.piphany's license revenue fell 31.6% in the quarter from the same period a year ago, to $7.1 million. That drop was partially offset by an 8.3% jump in services revenue, which came in at $13.12 million.

The company was able to slash its loss by cutting costs. The company's direct costs of providing its products and services fell 28.8% to $6.87 million. Meanwhile, its operating costs dropped 28.7% to $18.45 million, as the company cut its marketing and research-and-development expenses.

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