PHILADELPHIA (AP) ¿ An analyst cut his rating on Verizon Communications Inc. Tuesday, saying that U.S. businesses remain under duress in this economy and could delay upgrades to their phone systems. Shares of the telecom giant fell. Auriga USA analyst Chandan Sarkar downgraded Verizon to "Hold" from "Buy" and lowered his price target to $34 from $40. He said that while it's possible that the recession has passed and a rebound may be under way, Verizon's enterprise business ¿ serving corporate customers ¿ won't pick up until several more quarters. Sarkar said the phone carriers' business is a lagging indicator, meaning an improvement typically is spotted after the economy has started a recovery. The analyst also said profits from Verizon's international long distance also will come under pressure given one-price calling plans offered by competitors such as Vonage Holdings Corp., MetroPCS Communications Inc. and Cablevision Systems Corp. Verizon would be forced to cut rates to compete, driving down margins and profits. Sarkar cut his third- and fourth-quarter earnings estimates to 60 cents per share for each quarter, down from 63 cents in both periods. For 2010, he reduced his profit forecast to $2.58 per share from $2.67 per share. Shares of Verizon fell 65 cents, or 2.1 percent, to $30.39 in afternoon trading.
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