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Sycamore falls on downgrade

    Sycamore Networks (Nasdaq: SCMR) fell 10 percent Thursday after it was downgraded on concerns about a cloudy economy.

    Shares were down $3.44 to $31.81, well below their 52-week high of $199.50.

    Wit SoundView analyst Kevin Slocum cut his rating to "buy" from "strong buy" Thursday and removed it from Wit SoundView's Focus List. He admitted the downgrade was "abrupt" as he had recently been trying to raise the profile on Sycamore. "We believe things are worsening in the communications-equipment business," the analyst wrote in a research note.

    Though the company's product portfolio looks promising, Slocum said, he is concerned about the tough economic environment; Sycamore's heavy reliance on one customer, Williams Communications (NYSE: WCG); and the challenges inherent in pushing several new products.

    Slocum moved his earnings expectations to 20 cents a share on revenue of $561 million for this year and 34 cents a share on $888 million for fiscal 2002.

    Slocum said he sees the shares in the low- to mid-40s at best.