Goldman Whacks Telecom Sector With Downgrades

(Updated from 10:56 a.m.)

At least Frank Governali isn't making too many excuses.

In a research note this morning, the Goldman Sachs analyst rightfully admitted that the massive onslaught of downgrades and estimate revisions he and his staff unleashed on the telecom sector today might have been more appropriate 12 months or 18 months ago. "[But] midyear is a good time to consider the outlook for the remainder of the year, as well as the prospects for the new year."

The outlook doesn't seem too good. Governali downgraded WorldCom(WCOM Quote), Network Plus(NPLS Quote), McLeod USA(MCLD Quote) and ITC Deltacom(ITCD Quote) to market outperform, removing the companies from Goldman's recommended list. He also downgraded Equinix(EQIX Quote), Level 3 Communications(LVLT Quote), Metromedia Fiber Network(MFNX Quote) and XO Communications(XOXO Quote) to market perform from the recommended list, and he dropped Alaska Communications Systems(ALSK Quote), Allied Riser Communications(ARCC Quote), Focal Communications(FCOM Quote), Net2000 Communications(NTKK Quote) and Williams Communications(WCG Quote) to market perform from market outperform. ...