Heck, if the company you covered surprised everyone with a negative outlook, you'd downgrade it, too. Networking chip company PMC-Sierra ( PMCS) has been hit with a slew of downgrades this morning after the company said its outlook for the next few quarters was diminished due to inventory overhang and reduced demand for products.

It was cut by Credit Suisse First Boston to buy from strong buy. Lehman Brothers reduced 2001 earnings estimates to 84 cents a share from $1.64. UBS Warburg downgraded the company to hold from strong buy, and Robertson Stephens lowered its rating to buy from strong buy. Goldman Sachs downgraded the company to market outperformer from its recommended list.

The company last night reported earnings of 34 cents a share, in line with expectations, but said it expects a sharp decline in revenue and earnings for the first quarter. That scared investors this morning; the stock was down 40% in preopen trading today.


Cell-phone maker Ericsson was downgraded to buy from strong buy by Credit Suisse First Boston after the company reported poor results and cautioned that sales would grow at a slower rate than expected for the first quarter. Merrill Lynch downgraded it to a near-term accumulate but maintained its long-term buy.

"The shares are likely to tread water during what is likely to be a difficult transition in its attempt to outsource 100% of its handset production, and as its networks operator's division goes through temporary growing pains, which are likely to weigh on margins," Merrill analyst Adnaad Ahmad said.

Upgrades

Art Technology Group UP to strong buy at Prudential Securities.

Downgrades

Bemis ( BMS): DOWN to buy from strong buy at Lehman Brothers; price target: $35.

BroadVision ( BVSN): DOWN to hold from buy at CSFB; revenue estimates down to $605 million from $612 million for 2001; EPS dropped to 17 cents from 25 cents. Also downgraded to hold at Prudential Securities.

Broadcom ( BRCM):DOWN to long-term attractive from buy at Robertson Stephens.

Sovereign Bancorp ( SVRN):DOWN to accumulate from buy at Merrill Lynch.

UNUMProvident ( UNM):DOWN to intermediate-term neutral and long-term accumulate from intermediate-term accumulate and long-term buy at Merrill Lynch. Initiations

Emmis Communications ( EMMS - Get Report): NEW strong buy at Prudential Securities.