Shares of

Applied Micro Circuits

(AMCC)

tumbled a day after the company said that some orders have been canceled and others have been delayed, even as new bookings "remain robust."

Applied Micro lost $8.44, or 13.1%, to $55.88 in midday trading on the

Nasdaq

.

Goldman Sachs

responded to the disclosure with a downgrade. Analyst Nathaniel Cohn slashed his investment rating on the San Diego, Calif., semiconductor company to market outperformer and removed the company from the firm's U.S. recommended for purchase list, saying that "changes in the business momentum" will likely result in "some near-term pressure" on the company's shares.

"Our checks indicate that the cancellations and push-outs are coming from several customers and are in some fashion impacting all product speed grades," Cohn said in his report.

Applied Micro Circuits warned after the bell yesterday it was "on alert" as a result of the order delays and cancellations. The company didn't revise its fourth-quarter or first-quarter financial outlook, and said it expects to meet or beat expectations "if these cancellations are merely a blip and not a trend."

Analysts on average expect the company to post fourth-quarter earnings of 17 cents a share, compared with 8 cents a share last year. Wall Street is looking for first-quarter earnings of 18 cents a share, up from 11 cents a share a year ago, according to

First Call/Thomson Financial

.

Responding to the company's statement today, Cohn also said "it is difficult to believe AMCC's earnings multiple can continue to expand in the coming months," given the "increased uncertainty about whether the order changes are 'just a blip,' or the start of something bigger." Cohn, who didn't revise his earnings and revenue estimates, said it was unclear how the order cancellations could affect his estimates. He currently expects 58% earnings growth in 2001.

Cohn also pointed to the "sudden and severe drop in business momentum" faced by another semiconductor supplier,

PMC-Sierra

(PMCS)

. This scenario, coupled with economic uncertainty and an unwillingness by customers to hold excess inventories, points to "early signs of a deceleration in fundamentals," Cohn said.

PMC recently lost $2.50, or 3.6%, to $67.38 on the Nasdaq.