Riverstone Networks

(RSTN)

said its first-quarter results would be much lower than expected as sales dropped from last year.

The metropolitan area network provider now sees a first-quarter loss, excluding charges, of about 11 cents to 13 cents a share, compared with a loss of 3 cents a year ago, well below the Thomson Financial/First Call consensus estimate of a loss of a penny.

Revenue is expected to drop to $30 million to $31 million for the quarter from $44.17 million last year. Previously the company had predicted flat to slightly down revenue from the $51.3 million it saw in the fourth quarter. Analysts had been looking for revenue of $47.56 million.

Riverstone said the lowered results reflect "continued cautious spending on the part of telecommunications carriers," but the company added that it "continues to see strong initial deployments from carriers around the world, indicating that metro projects are a priority."

Shares of Riverstone Networks were dropping about 24% to $2.50 in premarket trading after closing at $3.30 Wednesday.