The old "earnings surprise" trick took a bite out of the stock of RWD Technologies Inc., the Columbia firm that helps big companies install new computer systems and train their workers to use them.

Stumbling since January, the stock fell hard on Tuesday after the company announced second-quarter revenue would fall about $3 million short of the $35 million analysts had expected and earnings would be only 14 cents or 15 cents a share instead of the projected 24 cents.

The stock had already come down from $22 a share to the $15 to $16 range, then plunged to $9.75 after Tuesday's announcement. It didn't budge in yesterday's big Nasdaq rally.

Chief executive Robert W. Deutsch said the shortfall resulted from "a significant falloff in demand" that produced a sudden slowdown in new contracts and unexpected deferrals of jobs that were in the works.

Hardest hit has been the company's Enterprise Resource Planning (ERP) Services division, which helps business customers maximize the benefits of "enterprise software" that handles a company's entire business in one intergrated suite of programs.

"The ERP thing just fell flat," said the blunt-spoken PhD who founded the company and continues to run it. When work was delayed, he said, "we got gapped." A team of workers that had been scheduled to finish up one job and immediately move on to another suddenly had nothing to do.

That's why such a small cut in revenue resulted in such a big hit to earnings, explained Legg Mason Inc. analyst William Loomis. When you have workers who are drawing a paycheck but not producing revenue, profits shrink quickly.

Loomis, who follows the information technology industry, said many firms in the business are falling victim to a Y2K crowding-out, because their corporate clients are so preoccupied with making sure their computers can handle two-digit dates when the calendar turns over at the end of the year that they're putting off other projects.

Legg Mason cut its rating on RWD stock in March when it looked as if the whole sector was entering a slowdown. "It's a short-term phenomenon," he said. "Longer term, going into the new year, we're still very positive."

Deutsch blamed day traders for the big hit taken by the stock. "Seventy-five percent of our stock never moves; it's in the hands of institutions," he said. With relatively few shares actively traded, it doesn't take much selling to drive a stock down.

CAPTION: RWD Technologies (This graphic was not available)