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posted a narrower first-quarter loss Tuesday but warned that the networking industry outlook remains "cautious."

For its quarter ended Oct. 30, the Chelmsford, Mass., maker of optical gear for telecom networks lost $7.8 million, or 3 cents a share. That compares with a year-ago loss of $12.2 million, or a nickel a share.

Revenue rose to $14.2 million from $8.4 million a year earlier. The latest-quarter loss was in line with Wall Street estimates, though the top line was about 10% shy of the five-analyst projection cited by Thomson First Call.

"Although first-quarter results improved modestly over last year's first quarter, the industry remains very cautious regarding spending in the optical networking environment," said CEO Daniel E. Smith. "As a result, we are continuing our review of strategic and financial alternatives to determine which may be in the best interest of our company and our shareholders."

The comments come three months after Sycamore

put itself on the block, hiring Morgan Stanley to seek buyers for the company. Sycamore rose sharply on that news, released in mid-August, but has since given back much of those gains.

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Sycamore makes optical equipment used by phone companies that transmit over fiber-optic cables. The tech shop enjoyed a brilliant if brief popularity on Wall Street when it went public in the fall of 1999. Investors were keen on optical gearmakers, which represented the vanguard of network upgrades.

Sycamore struggled to fit its futuristic switching and transport products into the old-line needs of large phone companies. New telcos like




Williams Communications

had been Sycamore's primary customers, but those outfits ran out of cash and curbed buildout plans after the tech bust.

Late Tuesday, Sycamore slipped 16 cents to $3.69.