The company's stock was trading at $17.66 (£12) per share at the end of trading yesterday and was down to $14.86 per share as of midmorning after analysts issued warnings about the company's earnings based on Goldman's comments.
While speaking to a group of investors, Goldman said he expected the market in the second quarter to be as challenging as it was in the first quarter. When answering a question about cash flow, Goldman told investors: "That clearly depends on revenue. As long as our revenue continues to hang in, so to speak, then we can deliver the earnings."
Much depends on the environment in the market, he added, and "the environment is every bit as challenging if not, frankly, more challenging this quarter as it was last quarter".
New York First Albany analyst Mark Murphy was unsurprised by Goldman's comments. Murphy said he has been cutting his earnings estimates for the Siebel for a while.
"The large-deal enterprise software environment remains quite weak," Murphy said, adding that the European IT market is also still weak, which will hurt Siebel.
Jeff Nevins, an analyst at First Analysis in Chicago, said if current trends continue, he would not be surprised if the company is forced to embark on some cost-cutting measures.