Sourcefire's Teething Troubles

Right out of the gate, network security company Sourcefire(FIRE Quote) stumbled badly.

The company, which made its debut on Wall Street just about a month ago, disappointed investors with its preliminary first-quarter results late Friday. Shares plunged nearly 30% Monday.

Revenue for the quarter ended March 31 will be in the range of $10.1 million to $10.5 million. That compares with revenue of $8.5 million a year ago, but sales are down from $15.9 million in the last quarter.

Net loss for the first quarter of 2007 is likely to be between $2.2 million and $2.6 million, wider than the $1.9 million loss in the year-ago quarter. Excluding items, the company expects a profit of $7.8 million to $8.2 million, an increase from $6.5 million last year.

Sourcefire attributed the numbers to a "smaller-than-expected initial order from a substantial and strategic new account and an unusual number of transactions delayed or deferred very late in the quarter."

The Columbia, Md.-based company offers services based on an open-source technology called Snort that detects and prevents intrusions on networks.

Shares of Sourcefire dropped $5.07, or 29.2%, to $12.28. The stock is now down 35% since its high of $18.83 on March. 15.

Investors' faith in Sourcefire may be shaken, but the company's problems, if it can recognize and fix them, could be temporary.