was hammered in Wednesday's premarket session after warning that weak shipments of advanced cell-phone chipsets will depress second-quarter revenue.

The company expects overall revenue in the quarter to be $465 million to $475 million in the quarter, short of the $515 million forecast by analysts surveyed by Thomson One Analytics. "Based on recent customer input, the company now expects that shipments of 3G chipsets will be down approximately $50 million from the December quarter, significantly more than previously anticipated," Agere said.

The company expects to earn 4 cents or 5 cents a share on a GAAP basis in the quarter, which ends this month. Excluding an $80 million tax benefit, the company expects to either break even or earn 1 cent a share in the quarter. On that basis, analysts were forecasting earnings of 1 cent a share.

Despite the cell-phone chip shortfall, Agere said its infrastructure systems unit should see sequential revenue improvement of 10% in the current quarter, with strength in wireless, wireline and enterprise applications. Excluding 3G chipset shipments, revenue for the company's client systems segment will fall slightly due to seasonal factors. Overall gross margin will rise sequentially.

Agere's A shares were recently down 41 cents, or 12%, to $3 on the Instinet premarket session.