Updated from 1:17 p.m. EDT

Wall Street began Thursday just as it did Wednesday: by pummeling a technology company after it warned that its earnings would be lower than expectations.

Investors wiped out more than half of the market value of

Visual Networks

(VNWK)

, a maker of management software, after it said its second-quarter earnings per share will likely be a penny, off 83% from the consensus among Wall Street analysts of 6 cents, according to

First Call/Thomson Financial

.

The company's stock finished down 14 1/4, or 54%, at 12.

Visual Networks, based in Rockville, Md., said that it expected to report revenue of about $32.2 million for the quarter and that its revenue and earnings for the second half of 2000 and for 2001 would be lower than the consensus estimates of Wall Street analysts.

The company attributed its earnings shortfall to the problems it had integrating

Avesta

with its operations. Visual Networks bought the e-business software company earlier this year in a $415 million deal, and it focused its attention on Avesta at the expense of the company's day-to-day operations and sales of its core software product, Visual Uptime. Avesta nearly doubled the size of the company's workforce, to 400 from 250.

"My reaction is that it is a good company, but needs some time to integrate this major acquisition," said Richard Sherman, an analyst at

Janney Montgomery Scott

, who covers Visual Networks. Sherman downgraded the company to a hold Thursday, after dropping it from buy to accumulate in June on concerns that the company would take longer than expected to integrate Avesta. His firm has not acted as an underwriter for Visual Networks.

Another analyst did the opposite. Todd Koffman, of

Raymond James & Associates

, upgraded the company's stock to a buy Thursday, on the hope that the company would refocus on its core business, which has historically been "obscenely profitable," he said, by selling Visual Uptime to such corporate clients as

WorldCom

(WCOM)

,

Sprint

(FON)

and

AT&T

(T) - Get Report

. Raymond James has not performed underwriting for the company.

"It's a great entry point for investors," Koffman said. "My feeling is that they will work out the problems and issues with these questionable acquisitions." In addition to Avesta, Visual Networks bought a similar company,

Inverse

, last year. That deal, too, has failed to pay off, he said.

Visual Networks' disclosure comes a day after investors

punished several technology companies, including

Computer Associates

(CA) - Get Report

,

Entrust Technologies

(ENTU)

and

BMC Software

(BMCS)

, because they issued profit warnings.

Visual Networks is scheduled to report its final second-quarter results on July 13.

Another company,

CapRock Communications

(CPRK)

, also issued a warning about its financial results Thursday. CapRock, which owns a long-haul fiber network that stretches through Texas, Louisiana, Arkansas, Oklahoma, New Mexico and Arizona, said its second-quarter loss would be much larger than analysts' forecasts because it lost a large contract for the sale of dark fiber.

The Dallas-based company said it expected to lose 50 cents to 53 cents a share in the second quarter, compared with a loss of 15 cents a share that had been expected by Wall Street analysts, according to First Call/Thomson Financial. CapRock closed regular trading down 5 15/16, or 33%, at 12.