Updated from 10:57 a.m. EDT

Shares of Business Objects ( BOBJ) plunged Friday after the company badly missed first-quarter earnings expectations and offered disappointing guidance for the June quarter.

In recent trading, shares of the business intelligence vendor were off $7.08, or 24.8%, to $21.50 on heavy volume.

The rout began after the close Thursday when the company reported that, excluding charges, net income in the March quarter was $9.4 million, or 10 cents per diluted share, at the very bottom of the company's guidance range. Analysts polled by Thomson First Call were expecting 15 cents a share.

However, the company did not use a pro forma accounting treatment that would have added $12.6 million in deferred revenue and approximately 10 cents a share, said Rob Tholemeier, an analyst and consultant who has followed business intelligence companies for six years. Why the company did not avail itself of the treatment was not immediately clear.

First-quarter revenue was $217.2 million, a year-over-year increase of 83%, and about $2 million better than consensus. Including charges, net income was $3.3 million, or 4 cents per diluted share, well below the net of $8.8 million, or 14 cents a share, posted a year ago.

Driven in part by the Crystal Decisions acquisition, Business Objects posted a 104% year-over-year gain in license revenue to $114.5 million.

Discounting Crystal Decisions, license revenue grew 12%. Tholemeier noted that Cognos ( COGN) the company's major competitor, posted license revenue growth of just 3%, excluding revenue generated by a recent acquisition. If you ask which company is growing faster, you have to say Business Objects," he said.

The French-owned software vendor was also hurt by approximately $6.8 million of nonoperating currency-exchange losses, an adverse impact of 5 cents per share. The loss was related to repayments of loans and other matters related to the acquisition.

Looking forward, the company told investors to expect pro forma earnings of 16 cents to 19 cents a share on sales of $220 million to $225 million in the June quarter. That number excludes deferred maintenance revenue of $8.7 million, or 6 cents per share. Analysts were projecting 24 cents a share on sales of $231.45 million.

For the calendar year, the company said earnings will be approximately $935 million, but did not give earnings guidance. Wall Street was expecting sales of $943.67 million.

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