Siebel Systems Inc. (SEBL) shares tumbled nearly 10 percent Wednesday, a day after the business software maker warned of disappointing first-quarter results in the latest setback for former stock market darling.

The San Mateo-based company said its expects to lose between $7 million to $9 million, or 1 cent to 2 cents per share, for the three months ending in March. If not for a charge to account for a recent acquisition, Siebel estimated it would have earned $2 million to $4 million, or as much as a penny per share.

Based on previous management guidance, analysts had forecast earnings of 5 cents per share, according to Thomson First Call.

With its software sales sagging, Siebel's revenue for the quarter is expected to be about $300 million, missing the $337 million target set by analysts.

"The magnitude of this miss is pretty significant," said industry analyst Jason Lind of Wells Fargo Securities. "To some extent, this is a company under siege."

Siebel disclosed the earnings disappointment after the stock market closed Tuesday. The company's shares fell 83 cents, or 9.1 percent, to $8.32 on the Nasdaq Stock Market (search).

Management blamed the shortfall on a large number of customers choosing not to buy Siebel products during the final few days of the quarter — always a pivotal sales period for software makers. That phenomenon has become a recurring problem for Siebel as its annual revenue has dwindled from a peak of $2.1 billion in 2001 to $1.3 billion last year.

Siebel emerged as one of high-tech's rising stars in the late 1990s amid rising demand for its specialty software, which helps companies analyze sales trends and identify prospective customers.

The past few years of trouble have coincided with increasing customer complaints about the complexity of Siebel's software and stiffening competition from larger rivals such as Germany's SAP (search) and Oracle Corp. (ORCL). Moreover, unconventional upstarts such as Salesforce.com Inc., which provide less expensive online applications, have joined the fray.

"They are sort of stuck in the middle, caught in a no man's land," Lind said.

To offset its weak sales, Siebel management assured analysts during a Tuesday conference call that the company will cut expenses. The executives declined to discuss whether the streamlining will include layoffs from its work force of 5,000 employees. Siebel has already jettisoned about 3,800 jobs in the past four years.

The persistent slump has battered Siebel's stock, which soared above $100 per share during the company's boom years. As part of the company's turnaround efforts, founder Tom Siebel stepped down as chief executive 11 months ago and turned over the job to a former IBM Corp. executive, Michael Lawrie.