Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of communications-software developer Smith Micro (Nasdaq: SMSI) were taking a beating today, falling as much as 26% in intraday trading on heavier-than-average volume.

So what: After the market's close yesterday, Smith Micro reported first-quarter results. The numbers looked pretty discouraging as revenue fell 40% from the first quarter of last year to $17.8 million. That tally did, however, top Wall Street's $17.2 million estimate. The same couldn't be said for Smith Micro's bottom line. A non-GAAP net loss of $0.13 reversed a $0.18 profit last year and missed analysts' target by a penny.

Now what: Maybe even more disconcerting for investors was the company's outlook for the quarter ahead. Management set a revenue-guidance range of $15 million to $20 million, which is easily short of the $24 million that Wall Street was hoping for. At the midpoint of the range, second-quarter sales would show a 44% decline from the second quarter of 2010.

Smith Micro's CEO blamed the current weakness on a purchasing cutback from a major customer but remained optimistic about the broader future for the company, highlighting the continued evolution of the capabilities of mobile-communication devices. At this point, though, investors couldn't be blamed for wanting financial proof of the company's opportunities.

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