Updated from April 23

Poor first-quarter results for

Siebel Systems

(SEBL)

were no surprise to investors -- the CRM software vendor warned of a miss weeks ago -- and consequently the stock was getting a pass on Thursday morning, up 7 cents, or less than 1%, to $8.70.

But analysts' reactions were mixed.

Patrick Walravens, of JMP Securities, noted tartly that "1Q03 was the worst quarter in terms of operating profitability in Siebel's history as a public company. As a result, Siebel's message of running a cash positive, profitable business seems tired." (JMP does not have a banking relationship with Siebel.)

On Wednesday Siebel reported that revenue in the first quarter slipped by 30%, and earnings dropped by more than 90%.

Nevertheless, the grim financial results were in line with reduced guidance issued by the company earlier this month. The company issued guidance for the fiscal second quarter roughly in line with Wall Street consensus: 2 cents to 4 cents in earnings per share and revenue of $340 million to $360 million, with license revenue of $120 million to $140 million. Wall Street estimates were for 3 cents EPS on revenue of $350 million.

The company also said it was cutting 5% of its workforce.

Revenue for the first quarter of 2003 was $332.8 million, compared to $477.8 million a year ago. Net income was $4.6 million, or a penny a share, compared to a 12-cent profit in 2002.

Mark Murphy of First Albany said the company's explanation that war jitters and the depressed economy caused deals to slip in March "held water," and said he was encouraged by the company's second-quarter guidance. He noted, however, that Siebel, along with other enterprise software vendors, is reporting smaller deal sizes, which makes forecasting license revenue significantly more difficult. (First Albany does not have a banking relationship with Siebel.)

In early April, Siebel, along with a number of other software companies,

warned that it would miss March-quarter estimates. Siebel said revenue for the quarter would fall between $330 million and $335 million. Wall Street's expectations were for revenue of $368.86 million, according to Thomson Financial/ First Call. The company also said it expects to earn a 1-cent profit, compared to earlier guidance of 3 cents to 5 cents per share.

CEO Thomas Siebel said at the time that several major deals set to close on the very last day of the quarter were not signed. "Our biggest competitors in the quarter were the economy, the economy and the economy," he said.

Siebel has gotten a lot of heat lately, as competitors like

SAP

(SAP) - Get Report

make gains in Siebel's core customer relationship management space. But at least one analyst says the currently bearish conventional wisdom about the company is wrong. "We believe Siebel represents a trading opportunity over the next year, and we are likely to see the stock move up 20% from its current levels," wrote Deutsche Bank analyst Brian Skiba.

He noted, however, that such an investment is best suited for investors who have a high tolerance for risk. (Deutsche Bank does not have an investment banking relationship with Siebel.)