Share prices of Copper Mountain [CMTN] tumbled Wednesday on news that the Palo Alto-based DSL solutions provider expects dramatically lower revenue and earnings in the fourth quarter of this year due to a slowdown in spending by competitive local exchange carriers.

On Wall Street, Copper Mountain melted down as its stock dropped $17 1/32, or 63.37 percent, to close at $9 27/32.

"[In] light of recent reductions in capital expenditure forecasts from many of our CLEC customers, we expect revenue and earnings to decline in the fourth quarter of 2000 on a sequential basis," Copper Mountain President and CEO Rick Gilbert in a statement following the company's third quarter financial report.

Net revenue for the third quarter rose 192 percent over the same period last year to $93.5 million, and profits for the third quarter beat Wall Street estimates.

However, the company's outlook for the fourth quarter and next year were apparently enough bad news to send its stock plummeting as investors focused on its dependence on the highly competitive CLEC sector.

"For the fourth quarter we currently expect to achieve net revenue of approximately $60.0 million and pro forma, fully-taxed, earnings per share of between $0.04 and $0.06. We expect these trends in the service provider landscape to impact our financial results for 2001 as well," said Copper Mountain in an earnings statement.

With most CLECs remaining in the red, many analysts expect buyouts and consolidations in the industry to accelerate in the future.

"There is no question that there will probably be consolidation," said Association of Communications Enterprises Executive Vice President David Gusky. "In the end, you will probably end up with a healthier industry."