360networks (TSIX) was down 27.6% in preopen Island trading after the company said late Tuesday it was scaling back its construction of trans-Pacific and Asia fiber-optic networks in the face of slower demand.

The company posted a first-quarter loss of 14 cents a share, beating analysts' estimates, but wider than the year-ago loss of 11 cents. Revenue increased to $274 million from $80 million, and the company said it still expected to be "free cash-flow positive" in 2002.

Alcatel

(ALA)

, which has a $1.1 billion contract with 360networks to supply equipment for its Pacific project, was down sharply in European trading. The company said 360networks' move could have a "significant impact" on 2001 results.