Updated from April 29



shares plunged 18% early Friday after the maker of telecom equipment posted a weak first quarter and trimmed second-quarter guidance.

The San Jose, Calif.-based company chose to accentuate the positive, noting strong sales to the government and an improving domestic picture. But the company acknowledged that problems in Asia hurt its numbers.

"Our revenues in Japan, which reached record levels in 2003, were below our expectations in the first quarter," said CEO Bobby Johnson. "We believe this was due to the timing of several service provider follow-on orders through our largest customer/reseller in Japan, Mitsui."

For the first quarter ended March 31, the company earned $19.9 million, or 14 cents a share, up from the year-ago $13.4 million, or 11 cents a share. Revenue rose to $104 million from $91.1 million a year earlier.

Analysts surveyed by Thomson First Call had projected a first-quarter profit of 17 cents a share on $113 million in revenue.

The first-quarter shortfall won't be an isolated event, judging by the company's comments. "We believe the spending patterns of our domestic enterprise customers and many of the key international markets we serve are gradually improving. As a result of this improving environment, we continue to invest in our sales footprint, operational infrastructure and brand-name recognition," the company said.

It then forecast a second-quarter profit of around 14 cents a share on revenue of $105 million to $110 million. Analysts expected EPS of 17 cents on revenue of $116 million.

Foundry slid $2.68 Friday Morning to $11.47.