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Rational Software


was down 7.6% in preopen


trading. After Tuesday's close, the company warned that fourth-quarter earnings would be in the 20-cent to 22-cent per-share range, possibly falling short of the

Thomson Financial/First Call

consensus of 22 cents.

The company also said it would cut its workforce by 400, or 10%, and announced a 20 million share buyback.

Credit Suisse First Boston

downgraded the stock to buy from strong buy and

Goldman Sachs

cut it to market outperformer from its recommended list.