Enterasys Networks (ETS) was down 22% in late morning after warning late Wednesday that sales with U.S. government customers fell in the wake of the Sept. 11 attacks.

Enterasys, formerly known as Cabletron, said earnings in the second quarter more than doubled, but that its sales outlook has deteriorated.

Government purchasing has been delayed since the attacks, the company said. The government sector represents about 20% of Enterasys' sales.

In one of a series of blows this morning against the networking sector, Merrill Lynch also lowered estimates on Enterasys. Merrill said it is now expecting the company to earn 38 cents per share in 2002 instead of 41 cents.

Also this morning, network stocks including

Extreme

(EXTR) - Get Report

,

Brocade

(BRCD)

and

Cisco

(CSCO) - Get Report

were all suffering after

estimates cuts and downgrades on the sector by analysts.

Riverstone Networks

(RSTN)

, a spinoff from Cabletron, was one of those downgraded by J.P. Morgan, to long-term buy from buy. Riverstone was down 26.1%.