By market close, shares of the Coudersport, Penn.-based company fell $7.44, or 22 percent, to $26.31 on volume of 1.6 million shares, nearly five times the stock's average daily volume.
Adelphia is a competitive local exchange carrier, meaning that it partners with local cable and phone providers for access to their systems to build its own fiber-optic networks. The company offers telephone, data transmission and broadband services.
Merrill Lynch analyst Ken Hoexter cut his second-quarter revenue estimate for the company by 5 percent to $78 million. He also lowered his price target to $70 from $85 and cut the stock to near-term "accumulate" from a "buy" rating.
Meanwhile, Bloomberg News reported that Adelphia has informed analysts that second-quarter revenue will dip to $78 million.
The news service quoted spokesman Terry Engels as saying the company expects to add 84,000 phone lines this quarter, less than the 90,000 forecast. Engels said Adelphia notified analysts Friday and yesterday that it will not meet sales forecasts, but a press release is not being issued. Engels could not immediately be reached for comment.
In his report, Hoexter said Adelphia's decision to delay installation of access lines until it installs voice switches in some networks is contributing the revenue decline. Hoexter said he expects the company to add 370,000 lines for the year, down from 411,000.
In a report issued today, analyst Frank Governali of Goldman Sachs maintained his estimate of 420,000 new lines for the year.
Analysts surveyed by First Call expect Adelphia to lose $1.15 a share this quarter, compared with a loss of 70 cents a year ago.
In the previous quarter, the company installed a record 81,165 access lines, generated $69.3 million in revenue, and posted a loss of 85 cents a share.