NEW YORK (CNN/Money) - Bristol-Myers Squibb Co. shares fell sharply Thursday after the drugmaker slashed its 2002 earnings and revenue forecasts the day before and brokerage firms followed up with a cut in stock price targets.

Bristol-Myers (BMY: down $6.02 to $31.68, Research, Estimates) stock was down more than 17 percent in afternoon trading, after setting a new 52-week low of $29.16 earlier Thursday.

Nine brokerages either cut estimates for the company or simply downgraded the stock, with the size of Bristol-Myers' guidance cut taking analysts by surprise.

Bristol-Myers said Wednesday that due to poor performance of key products its 2002, earnings would be 25 to 30 percent lower than the $2.41 it earned last year. On top of that the company said its plan to cut excess wholesale inventories will cut earnings by an additional 35 to 40 cents a share.

Including inventory reduction and lowered sales expectations, Bristol-Myers' new range of guidance stands at $1.29 to $1.46, compared with previous guidance of $2.25 to $2.35 a share the company affirmed on Jan. 24 in its fourth-quarter earnings report.

Analysts had been preparing for a cut in guidance after the company said in its annual report that it sold too much to wholesalers last year. That was expected to hurt sales this year, but the poor performance of key drugs blindsided analysts.

"The magnitude of the shortfall for 2002 is startling," Lehman Brothers analyst Tony Butler said in a research note. "While it became clear Tuesday that inventory overstocking would dampen 2002, the company yesterday provided 2002 normalized guidance which will disappoint most investors."

Tim Anderson, analyst with Prudential Securities, said even he was surprised by the size of the inventory problem.

"I though it was a situation that might cost up to 20 cents [a share in profit], but not up to 35 cents," Anderson said.

He said the warning underscores the pressure Bristol-Myers had been under because of anxiety treatment BuSpar, diabetes drug Glucophage and cancer drug Taxol going generic.

Len Yaffe, analyst with Banc of America Securities, said Bristol-Myers' inventory trouble came when drug distributors stocked up ahead of several drug price increases over the past year. But he said management should fix that problem by 2003.

"We're estimating two to four quarters to work that inventory, which estimated at $800 million to $1 billion based on company guidance, out of the channel," Yaffe said. "So we think they'll be able to flush that out of the channel by the end of the calendar year."

Bristol-Myers did not say how long it would take to reduce the inventory, but said they would do it as rapidly as possible.

Yaffe said he was keeping his "market perform" rating on the stock, seeing earnings for 2002 at $1.80 per share excluding inventory reductions costs.

Thursday afternoon, Standard & Poor's said it placed Bristol-Myers on CreditWatch with "negative implications" after its warnings.

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"Standard & Poor's plans to meet with management to discuss the implications of recent developments on the company's financial policies, and earnings and cash flow prospects beyond 2002, before resolving the CreditWatch listing," said Standard & Poor's credit analyst Arthur Wong in a statement.

In response to company performance he deemed "unacceptable," Chairman and CEO Peter R. Dolan said Wednesday he will be taking direct control of the company's global pharmaceutical business.

When asked in a Wednesday conference call how the company's guidance could change so much so quickly, Dolan said results from the early months of 2002 showed that Bristol-Myers' prediction for U.S. primary care sales were "dramatically off track."