J.P. Morgan Downgrades Rational Software

Analyst says the software company's revenue and earnings projections are lower than his own estimates

J.P. Morgan downgraded Rational Software (RATL ) to market perform from long-term buy.

Analyst Christopher Galvin says the company's $172 million to $176 million Q2 revenue projection compares with his $185 million estimate. The company's $0.07-$0.08 EPS estimate also is lower than his $0.09 estimate.

Galvin thinks the troubling aspect of the company's preannouncement Tuesday stems from a rapid deterioration of business conditions since analyst day in mid-June. Galvin cut his $905 million fiscal 2002 (March) revenue estimate to $840 million, and cut his $0.55 EPS estimate to $0.50.

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