Let the analyst games begin.

After the swirling mists of

Oracle's

(ORCL) - Get Report

crystal ball revealed a future that wasn't so good and wasn't so different than that of its peers, Wall Street showed up en masse to pound the company.

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Last night, the second-largest software maker and database management kingpin announced that its third-quarter earnings would slump from earlier forecasts because product sales didn't pull up at the end of the quarter. Software companies usually count on a late-quarter sales spike, known as the "hockey stick" effect, because sales are flat for much of the quarter before jumping just as the quarter closes. But this time, those orders were either scrapped entirely or delayed, causing Oracle to come in with lower estimates.

Hell hath no fury like analysts scorned.

Lehman Brothers

analyst Neil Herman cut his 2001 full-year estimate to 47 cents a share from 52 cents a share. Wall Street's current consensus estimate for the year's earnings is 51 cents. Herman cut his 2002 earnings per share estimate to 55 cents from 67 cents.

And Goldman Sachs

analyst

Rick Sherlund downgraded Oracle to market outperform, taking the stock off the brokerage's U.S. recommended for purchase list. He also trimmed his 2001 earnings per share estimate to 47 cents from 51 cents and 2002 to 57 cents from 64 cents.

Merrill Lynch

analyst Christopher Shilakes cut the company to long-term attractive, telling investors that the company would trade off sharply during Friday's session. Shilakes did not mince words in his assessment of Oracle's current position, casting doubt that the company's model could continue to grow earnings by 20%.

Shilakes cut his 2001 estimate to 47 cents a share from 52 cents a share, while dropping revenue forecasts to $11.9 billion from $11.3 billion.

"The magnitude of Oracle's shortfall increases the risks in particular for software companies that rely on large deals to make their number at the end of the quarter," Lehman's Herman wrote, scolding the company for warning now. It had announced on Feb. 13 that sales would not be slowing. On that day before Valentine's Day, Oracle had whispered sweet nothings into Wall Street's ear, standing by its bullish predictions for a 75% upswing in data applications revenue. But according to last night's announcement, the company only booked 50% growth in applications sales.

"Given recent Oracle management optimism, every software stock is now likely to be a show-me story over the near-term, with investors putting very little faith in management comments," Herman wrote. He sees upside, however, in Oracle competitor

BEA Systems

(BEAS)

-- and went so far as to suggest in the note on Oracle that investors consider its rival.

"However, for long-term investors, we believe this time period will ultimately prove to have been a buying opportunity," Herman wrote of the sector.

It's not easy to be a software company, as evidenced in the lower-than-expected sales over at Oracle.

Goldman Sachs

and others have made it even harder by cutting ratings and estimates.

Analyst Sherlund, who cut Oracle to market outperform this morning, also cut his ratings on many of its competitors. He trimmed

Siebel Systems

(SEBL)

, which makes a software suite geared for online business, to market outperform.

Brocade Communications

(BRCD)

, a softwaremaker focused on fusing storage systems into a network, was cut to market outperform by analyst

Laura Conigliaro. She also clipped her 2001 estimate on the company, dropping it to 53 cents from 58 cents.

As information technology spending slows, it will be harder and harder for companies to close sales at the end of the quarter. That was one of the biggest issues Oracle faced as it attempted to come through on its promises.

One of the segments that will be hit hard by slowing spending is that of software providers to the slumping e-business sector. Goldie analyst Thomas Berquist removed five companies from the U.S. recommended for purchase list, cutting them all to market outperform.

Actuate Software

(ACTU)

,

Ariba

(ARBA)

,

Commerce One

(CMRC)

,

i2 Technologies

(ITWO)

and

MatrixOne

(MONE)

were all affected by the ratings change.

All in all, Goldman Sachs nailed a grand total of 12 companies down to market outperform and took them off the U.S. recommended for purchase list.

Tibco Software

(TIBX)

,

Inet Technologies

(INTI)

,

360networks

(TSIX)

and

Parametric Technology

(PMTC)

were the others.

Credit Suisse First Boston

analyst Brent Thill had few nice words for softwaremakers, cutting his rating on a dozen companies.

"Based on accumulation of announced results, as well as background conversations, it appears we have gone beyond IT project reprioritization and reached a level of indiscriminate spending cuts," he wrote to investors.

Thill cut eight companies to buy from strong buy. Those included some stocks already downgraded by Goldie, such as Actuate, Siebel Systems, i2 Technologies and Commerce One.

Selectica

(SLTC)

,

E.piphany

(EPNY)

,

Retek

(RETK)

and

Art Technology Group

(ARTG)

were the others.

Vignette

(VIGN)

, which makes Web publishing software, was cut to hold from strong buy.

Documentum

(DCTM)

,

PeopleSoft

(PSFT)

and

ONYX Software

(ONXS)

were cut to hold from buy.

It looks like there'll be a little spot of e-trouble in the e-services sector.

W.R. Hambrecht

analyst Gregory Gore wrote that he expects companies in this sector to guide earnings estimates lower in the near future.

The problems facing e-service companies are myriad. An information technology spending slowdown clogs a vital revenue stream for companies such as

Sapient

(SAPE)

and

Scient

(SCNT)

. Gore advised investors that his current estimates were too aggressive given the current economic climate. But he refrained from making any adjustments now.

"We do not see near-term positive catalysts for any of the stocks under coverage," he said.

DiamondCluster

(DTPI)

was cut to buy from strong buy with a new price target of $40, which is $15 lower than the previous estimate. Gore maintained his rating on other e-service companies, keeping Sapient,

Inforte

(INFT)

and

AnswerThink

(ANSR)

at buy.

Infosys Technologies

(INFY) - Get Report

and Scient were kept at neutral.

Downgrades

American Classic Voyages

(AMCV)

: DOWN to market perform from market outperform at Goldman Sachs.

Broadcom

(BRCD)

: DOWN to market outperform from U.S. recommended for purchase at Goldman Sachs.

Cypress Semiconductor

(CY) - Get Report

: DOWN to long-term attractive from long-term buy at

Robertson Stephens

.

IDEX

(IEX) - Get Report

: DOWN to buy from strong buy at Credit Suisse First Boston.

Siebel Systems

(SEBL)

: DOWN to market outperform from U.S. recommended for purchase at Goldman Sachs.

Initiations

Allied Capital

(ALLC)

: NEW long-term attractive at Robertson Stephens.

C.H. Robertson

(CHRW) - Get Report

: NEW neutral at Merrill Lynch.

Worldcom

(WCOM)

: NEW buy at Robertson Stephens.