WorldCom's

(WCOM)

fraud revelations battered heavily leveraged companies on its perimeter Wednesday, most notably optical equipment providers

Corning

(GLW) - Get Report

,

Juniper Networks

(JNPR) - Get Report

and

Nortel Networks

(NT)

.

Double-digit losses sank shares of several of the major network equipment providers to new 52-week lows. Corning, the century-and-a-half-old glass company swept up by the Internet boom, led the pack, plunging 82 cents, or 21.64%, to $2.97. Optical giant Juniper's shares tumbled 90 cents, or 14.45%, to $5.38. Nortel lost 20 cents, or 12.42%, to $1.41.

Lucent

(LU)

shares lost 31 cents, or 15.74%, to $1.66.

JDS Uniphase

(JDSU)

fell 23 cents, or 8.98%, to $2.33.

Tellabs

(TLAB)

fell 56 cents, or 8.82%, to $5.79.

Nortel shares were hit hard even though the company said it has only "minimal" WorldCom exposure and no vendor financing agreements with the company. Nortel was being dragged down in part by a warning from French competitor

Alcatel

(ALA)

, which said it expects to report an operating loss for the year rather than the operating profit it had forecast.

Just a Second

Corning also protested that its WorldCom exposure was practically nothing. Indeed, one analyst made a case that the reaction -- at least on a lost-revenue basis -- was way overdone when one considered the amount of capital investment WorldCom made with equipment providers.

Credit Suisse First Boston analyst Max Schuetz pointed out that after properly reclassifying its questionable costs, WorldCom's capital expenditure was only about $480 million in the first quarter, which is under 5% of its total North American spending. But he cautioned, "investors have a lot of fear of debt in general." Likewise,

Agere Systems

(AGRA)

got hit, losing 26 cents, or 13.54% to $1.66, a new 52-week low, while JDS Uniphase was down 22 cents, or 8.6%, to $2.34. CS First Boston has performed underwriting for Corning.

Hardware provider

Electronic Data Systems

(EDS)

got slapped after WorldCom was identified as a "landmark contract" for the company, according to a research note from Bear Stearns analyst James Kissane. Kissane pointed out a 1999 IT outsourcing contract between the two companies of $5 billion to $7 billion over 10 years, which is now being called into question. "Outside of GM," Kissane wrote, "WCOM was the largest commercial base contract ever signed by EDS. In order to win the contract, EDS had to buy MCI Systemhouse, a chronic underperforming systems integration company based in Canada. While the operations of WCOM will not cease, we doubt the contract will generate the returns that EDS originally expected." EDS was down $4.05, or 9%, to $42.58.

Some Exceptions

In one of the few encouraging signs that the market for equipment has not completely dried up, optical equipment provider

Ciena

(CIEN) - Get Report

managed to avoid free fall by announcing a deal with

Sprint

(FON)

to provide the telecom company with switches for its international networks. Ciena shares were down only 8 cents, or 2.08% to $3.77.

Elsewhere, wireless operators were singed but mostly escaped charring. While "there's no direct impact" from WorldCom's financial improprieties, wireless companies "that are more leveraged seem to be taking more of the brunt of the selloff," said W.R. Hambrecht analyst Peter Friedland.

Nextel

(NXTL)

shares hovered millimeters above their 52-week low, losing 24 cents, or 7.23%, to $3.08.

AT&T Wireless

(AWE)

lost 43 cents, or 7.57%, to $5.25.

Sprint PCS

(PCS)

shares dipped 16 cents, or 3.84%, to $4.01.

Leap Wireless

(LWIN)

, whose corporate credit rating was put on credit watch by Standard & Poor's last Friday, suffered a 17-cent loss, or 10.83% to $1.40.

Airgate PCS

(PCSA)

, a Sprint PCS network partner, also dropped 9 cents, or 7.26%, to $1.15.

There's an attitude on Wall Street that for companies even remotely associated with wireline companies, it's "guilty until proven innocent," said Thomas Wiesel Partners wireless operator analyst Ned Zachar. "It's going to be that way for some time." Wireless companies in general have more transparency in their accounting, partially because there have been a lack of mergers and acquisitions, despite the apparent need for the industry to survive the telecom "nuclear winter," said Zachar.