Siebel Systems (NASDAQ:SEBL) met previously raised guidance for the fourth quarter, but its shares plunged some 7% to $14.40 this afternoon after the developer of customer relationship management (CRM) software appeared cautious with its profit guidance.

Total revenues and license revenues -- a key indicator of new business and future growth for software firms -- fell year over year. The latter, however, at $150.3 million, jumped 35% sequentially, reflecting a renewed strength in IT spending.

The company also trimmed its operating expenses 39% with the help of a leaner employee base. This helped Siebel reverse last year's loss by posting net income of $41.5 million, or $0.08 per share.

The company reported 42 deals of $1 million or more in the fourth quarter, five of which were worth $5 million or more. Though this was a considerable improvement over last year's quarter, the size of the average deal fell 8%, contributing to the decline in revenues.

Major customer wins included Proctor & Gamble (NYSE:PG) and Home Depot (NYSE:HD). Siebel also benefited from repeat business with, among others, Nokia (NYSE:NOK), Eli Lilly (NYSE:LLY), and General Dynamics (NYSE:GD).

Perhaps as importantly, management declined to offer guidance beyond the next two quarters, and even that was conservative. In the first quarter, Siebel expects to earn $0.04 to $0.05 per share on revenues of $315 million to $335 million. The company also said it expects to earn $0.06 to $0.08 per share on sales of $340 million to $365 million for the second quarter.

You can't really fault Siebel for being cautious. After all, high expectations seem already to be baked into the stock price -- and at least management didn't lowball guidance for a full year.

Remember, we were right to think that guidance offered back in October looked conservative. If IT spending is really back, don't be surprised if Siebel raises guidance again before it reports first-quarter earnings.

Give us your take on the Siebel Systems discussion board. Jeff Hwang can be reached at JHwang@fool.com.