Shares of Beijing-based VisionChina Media Inc. sank Wednesday after the company, which operates digital advertising screens on mass transportation systems in China, forecast first-quarter revenue below Wall Street expectations.

VisionChina's American Depositary Shares fell $3.11, or 37.9 percent, to $5.09. In the past year, the stock has traded between $4.80 and $12.27.

Late Tuesday, VisionChina predicted first-quarter revenue of at least $22 million, which is far lower than the $38.4 million analysts polled by Thomson Reuters are looking for.

The company expects several factors will hamper revenue, including a sales force restructuring and the integration of subway advertising company Digital Media Group, which is recently bought.

The company also said that in the fourth quarter it earned $5.6 million, or 8 cents per share, compared with $14.8 million, or 20 cents per share, in the year-ago quarter.

The company's profit matched analysts' estimates, but its revenue — $31.8 million, down from $34.3 million a year before — fell a bit short of their projections for $32.4 million.

In a note to clients, Susquehanna analyst C. Ming Zhao downgraded the stock to "Negative" from "Neutral" and set a $4.50 price target.

Zhao said that while the company's fourth-quarter earnings met analyst estimates, its outlook "shocked" investors. He thinks that the company's guidance, coupled with an expected $29 million in first-quarter costs and expenses, will lead it to report a loss this year.