Updated from 4:55 p.m. EDTInvestors hammered shares of Business Objects ( BOBJ) after the software company warned late Thursday that it will not hit its second-quarter targets for revenue and earnings. The stock was halted for late trading immediately before the announcement, and when it resumed on Instinet shares dropped $3.79, or 14%, to $43. The company said it now expects revenue in the quarter to range from $287 million to $291 million. In April, it told investors to expect sales of $295 million to $300 million. Non-GAAP earnings will be 25 cents to 28 cents a share, compared with earlier guidance of 30 cents to 33 cents a share. Analysts polled by Thomson First Call were expecting a profit of 33 cents a share on sales of $298.5 million. We are disappointed with our performance this quarter," said John Schwarz, chief executive officer of Business Objects. "Despite total revenue growing year over year, our license revenue was below expectations, due in part to a lower closing rate on large transactions. In addition, the European and Asia-Pacific regions will show declining revenue compared to last year, detracting from growth in the Americas region." In a conference call with analysts and investors after the announcement, Schwartz repeatedly said that he won't really understand why the quarter soured until Business Objects reports final quarterly results on July 26. However, he did indicate that the fault was internal, and used the term "poor execution" several times. The CEO fingered slower-than-expected license revenue as the major culprit in the miss, saying he expects it to come in between $116 million to $118 million, a decline of 6% (at the midpoint) from the $125 million posted last year at this time. Rob Tholemeier, a private investor with holdings in the business intelligence sector, said "the real issue is that the company lost focus by going after the mid-market, which is not the core." Tholemeier maintains that the natural market for business-intelligence software is the major enterprise space, companies that have thousands of applications that need to be integrated and mined for data. "The mid-tier," he says, "doesn't need it."