Merrill Lynch has downgraded Gilat Satellite Networks (Nasdaq:GILTF) from long-term Buy to Accumulate after the company's acute results warning released this week. The bank left its medium-term rating of the Israeli satellite communications equipment supplier at Hold.

Gilat said it expects to lose $267 million for the third quarter, or $11.4 per share. It blamed its shortfall on the tragic events of September 11, which postponed transactions expected to close during the quarter. It also admitted to misreading the changes in its market.

Minus the various one-time charges, Merrill wrote, the company's quarterly loss would have been about $20 million.

Merrill's analysts said they will shortly be updating their forecasts for the Israeli satellite communications equipment provider.

Gilat stock yesterday fell nearly 40% on Nasdaq, lowering the company's market cap to $125 million. That is only half the amount the company is posting in one-time charges for the quarter.