Aladdin Knowledge Systems (ALDN) shares are down sharply today after a disappointing March quarter report and a reduction in 2008 guidance.

For the first quarter, the Israeli security software company reported revenue of $30 million and non-GAAP EPS of 29 cents; the Street was looking for $29.5 million at the top line (so that’s fine) but 32 cents at the bottom line (not so fine.)

For the full year, the company still sees revenue of $123 million to $130 million, but their profit guidance is lower. Aladdin now sees pro forma profits of $1.20 to $1.30; previously, the company was looking for $1.39 to $1.51.

Aladdin shares today have tumbled $5.98, or 27.5%, to $15.77.