Micromuse ( MUSE ) shares took a pounding early Tuesday after the software company preannounced "disappointing" third-quarter revenue.

The San Francisco-based company said revenue would be $34.5 million to $35.5 million, compared with $33 million a year ago.

Shares fell $1.27, or 19.6%, to $5.20 in premarket trading.

Analysts expect the company to post net income of $4 million, or 5 cents a share, on revenue of $39.4 million, according to the consensus estimate of Thomson First Call.

"We were adversely affected by longer sales cycles due to the cautious decision making in the marketplace," the company said in a statement. While a number of forecasted transactions were delayed or deferred, we continue to be optimistic about the company's long-term growth prospects and are confident in our new go-to-market strategy and product road map."

The company will announce full and final quarterly results on July 22.