Wall Street analysts cut estimates on Macromedia's 2003 results in response to the company's profit warning issued yesterday for the third quarter 2002, ending December 31.

Credit Suisse First Boston analyst Gibboney Huske lowered the software company's prospects by 30 cents, down from 50 to 20 cents a share.

Another analyst for Robertson Stephens, Aleksandar Zorovic, raised his forecast of the company's loss to 39 cents from 24 cents a share.

"In the near-term, we expect the stock to trade around the $20 level," said Steve Frankel, analyst at Adams, Harkness & Hill.

Merrill Lynch analyst Jay Vleeschhouwer, said: "We are assuming that Macromedia returns to profitability in the June 2002 quarter."

These reactions came after Macromedia announced "tough market conditions" had forced the company to cut its fiscal third-quarter revenue outlook.

"While our short-term results continue to be affected, we are confident in our products and our long term strategy for growth," said Rob Burgess, Macromedia chairman and CEO.

Vleeschower told CBS MarketWatch that the success of forthcoming products in the March and June quarters is vital to its recovery. The analyst expressed confidence that Macromedia's products would convince customers to upgrade. The company will release a new version of Flash at some point over the next quarter, the analyst revealed.

Macromedia's share priced dropped sharply yesterday from $27.17 to $19.95.