Rational Software

(RATL)

was down 7.6% in preopen

Island

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

TheStreet Recommends

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.