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Liberate Technologies

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is singing the capital-expenditure blues, and cable TV investors are wondering which other industry suppliers are quietly humming the same tune.

The developer of interactive cable software cut its revenue guidance by some 19% for the fourth quarter ended May 31, citing factors such as economic conditions and slowing cable capital spending. The Monday night warning, which led at least three analysts covering Liberate to lower their ratings on the stock, suggests suffering cable stocks could fall even more as news of an emerging spending slowdown leaks out.

Liberate's shares dropped 37 cents Tuesday afternoon to trade at $3.20. Mirroring the performance of highly leveraged cable operators such as




Charter Communications

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, Liberate's shares are down 72% for the year.

"The combination of several factors -- including the broader economic environment as well as financial restructuring and slowing capital expenditures in the cable industry -- have slowed the pace at which network operators are launching advanced digital services," said Liberate CEO Mitchell Kertzman in the company's statement Monday. "Nevertheless, we continue to outperform our competitors in a difficult market, and while we cannot give specific guidance for next quarter's revenues, we currently anticipate a general trend toward higher pro forma revenues and progress toward pro forma profitability."

Although Liberate faces specific issues such as

Liberty Media's

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deal to acquire control of rival

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( OPTV), and the fact that two-thirds of its revenue comes from outside the U.S., analysts are speculating that Liberate's troubles aren't limited to the company's core European business.

In part, that comes from

Adelphia Communications

( ADELA)-induced sector skittishness, which appears to be limiting the appetites of lenders and equity investors for cable industry borrowing and spending.

"We believe that a catalyst for Liberate may be further out than previously expected," writes RBC Capital Markets analyst David Lee Smith, "as North American cable operators have come under intense investor scrutiny following the recent disclosures of Adelphia." Smith cut his Liberate rating from outperform to sector perform; his firm has been an underwriter for Liberate.

"We are ... concerned about where business stands regarding prior positive comments for North American deployments," writes William Capital's Shayna Malnak, who cut her rating Tuesday on Liberate from buy to hold. Williams hasn't been a Liberate underwriter.

Along with lowering guidance for fourth-quarter revenue -- which didn't affect per-share earnings guidance -- Liberate said it was pushing its forecast of pro forma profitability back from the first half of its current fiscal year to the second half.

Anthony Gikas of U.S. Bancorp Piper Jaffray wrote in his Tuesday report on Liberate that he's "cautiously optimistic" that deals with major cable operators will be struck in North America, but he believes actual deployments would likely be in the middle of the 2003 calendar year. Gikas dropped his rating from outperform to underperform; his firm has been an underwriter for Liberate.

Now investors must figure out whether a capex slowdown -- which the cable industry has promised Wall Street as a part of its move toward achieving free cash flow -- will further damage other advanced TV suppliers, many of whose shares also fell Tuesday.

It's a pretty motley crew already, going by 2002 stock performance: OpenTV's shares are down 56% for the year. Video-on-demand suppliers

SeaChange International

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Concurrent Computer


are down 77% and 64%, respectively. Interactive advertising firm

Wink Communications

( WINK) is up 13% to $1.80, while traditional cable equipment supplier


( SFA) is down 27%.