Commentary: The slowdown in telecommunications capital spending has claimed another victim, and investors will be jumping off Copper Mountain Wednesday. The Copper Mountain meltdown is just a piece of what is looking like an increasingly stressed-out tech sector. First the good news, Copper Mountain, which provides digital subscriber line equipment, topped estimates by a penny with third quarter earnings of 27 cents on sales of $93.5m. That's the end of the good news. The company dropped a bombshell on investors with its outlook. Well actually, Copper Mountain's risks were outlined in regulatory filings, but who reads those? Copper Mountain's outlook has to have investors wondering where the next shoe will drop. Turns out that competitive local exchange carriers (CLECs) are cutting back spending. That's not news. But the effect on Copper Mountain's upcoming quarters is a bit of a shocker. It's safe to say Copper Mountain is the "look out below" stock of the day. Copper Mountain is expecting sales of about $60m in the fourth quarter, roughly a 35 percent drop from the third quarter. Earnings will be between 4 cents and 6 cents a share, way short of the current First Call estimate of 28 cents a share. Copper Mountain projected sales between $300m and $330m in fiscal 2001 and earnings of between 16 cents to 25 cents a share. Analysts were expecting a profit of $1.37 a share in fiscal 2001. For perspective, WR Hambrecht analyst Tim Savageaux was predicting sales of $524m for 2001. In a research note last month, Savageaux said persistent concerns about Copper Mountain's CLEC customer base "was overblown". According to Savageaux, Copper Mountain was a compelling value compared to broadband networking peers such as Terayon, Redback Networks and Efficient Networks. He even tried to put Copper Mountain in the league of Juniper because of some new products. Boy, was he wrong. At least he wasn't alone -- nine of ten analysts rated Copper Mountain at least a "buy". To find out why Copper Mountain is imploding you have to look no farther than the company's limited customer base. In the quarter, Copper Mountain's top four customers were Northpoint at 35 percent, privately held NTS Communications at 14 percent, McLeod USA at 14 percent and Lucent at 12 percent. Lucent sells Copper Mountain gear as an original equipment manufacturer. Lucent's woes are well-documented, but there are other holes in Copper Mountain's customer base. Northpoint, which is being acquired by Verizon, won't spend as much on gear. CLECs, which largely funded expansion with public equity and debt offernings, can't attract investors. Copper Mountain could use a big, stable telecommunications firm as a customer. The bottom line: Copper Mountain has little visibility into future quarters. It remains unclear whether Copper Mountain's fall will affect the competition. According to regulatory filings, Copper Mountain views Cisco Systems, Lucent, Alcatel, Nokia and Paradyne as its main competition. IBM delivered a typical quarter -- revenue growth wasn't impressive, the company managed to hit estimates, and there were plenty of mixed signals. It wasn't exactly what investors were hoping for. The big takeaways from Big Blue's conference call were sales were at the low end of expectations and the company had some worrisome trouble spots. First, there's the shortages. IBM can't meet demand because of component shortages. IBM also dropped the ball on software sales. Overall the quarter just wasn't impressive, which isn't that surprising since many of IBM's customers have problems. Blame the euro, blame IBM's product transition or blame something else. Investors are begging for good news, and IBM, a proxy for information technology, didn't cheer anyone up. If IBM's conference call was devoid of information, Intel's was even worse. Intel wasn't going to get into product, revenue or chip ramp projections. Intel is obviously gun shy after a profit warning. Intel had zippo when it came to the fourth quarter outlook. There wasn't any elaboration beyond what was in the press release. Intel sees sequential revenue growth of four percent to eight percent from third quarter sales of $8.7bn. Those last few downgrades are on the way. Officials said the third quarter was doing just peachy until Europe slowed down in September. The slowdown caught execs "off guard". Notably, Intel said the slowdown occurred right around the time much of Europe was striking to protest high fuel prices. Turns out even the world's largest chipmaker isn't immune to gas problems. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research. To have your say online click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.