Shares of Aliso Viejo’s Smith Micro Software Inc. plummeted in afterhours trading Wednesday after the company reported first-quarter earnings that missed Wall Street expectations and a revenue outlook in the current quarter that fell short of estimates.

Smith Micro, a maker of software for cell phones and for connecting mobile devices to wireless networks, saw shares sink more than 9% in extended trading on a market value of $250 million as investors seized upon the company’s dreary revenue outlook for the current quarter.

Smith Micro reported an adjusted first-quarter loss of $4.7 million, compared to an adjusted profit of $6.2 million a year earlier.

Analysts on average were expecting a loss of $4.1 million.

The company reported revenue of $17.8 million for the first quarter, down 40% from a year earlier, and on par with analysts’ expectations.

“First-quarter revenue was in line with our revised expectations, after we became aware that orders for our core connection manager product from one of our major customers would be greatly reduced this quarter,” said William Smith, chief executive of Smith Micro.

The company didn’t name the customer.

The revenue drop affected gross margins as they slipped to 86%, down from 92.6% a year earlier.

Smith Micro forecast revenue for the second quarter of $15 million to $20 million.

Analysts on average are forecasting revenue of about $24 million.

Smith reiterated prior comments he's made about the company expecting sales to improve in the second half of the year, aided by the launch of software products that improve mobile broadband services.

“We remain very positive about the long-term prospects of the company as technology evolves in the marketplace, and we anticipate that the pace of sales for mobile broadband devices using our software will begin to return to improved order levels in the second half of this year,” he said.

The company did not provide an outlook on profits.

Analysts are forecasting profits around $350,000.

Smith Micro’s bread and butter is selling software that’s used by big cell phone service providers. Some of its software does over-the-air updates and helps mobile devices connect to a carrier’s network.

Big customers include Verizon Wireless, part of New York’s Verizon Communications Inc., Sprint Nextel Corp., AT&T Inc., Motorola Inc. and others.

The company also does what’s called connection management software for computer makers Dell Inc. and Hewlett-Packard Co.