BlackBerry Storm’s Problematic Start No Help To Verizon Stock (RIMM, VZ, AAPL)

Posted on Tue 27th Jan, 2009 02:24:35 PM

Even after over $100 million spent over two years Research in Motion’s (RIMM) BlackBerry Storm has had a very rocky start. Total units sold have completely underpaced Apple’s (AAPL) successful launch for the iPhone and the Storm has not helped Verizon (VZ) stock which is down after reporting earnings this morning.

Problems with the Storm are no joke according the WSJ:

People familiar with the matter say the company sold roughly 500,000 units in the first month after the Storm’s Nov. 21 launch. That is a promising start, though well off the pace of AT&T Inc.’s sale of 2.4 million iPhone 3G devices in that device’s first full quarter on the market.

Some Storm owners have complained about everything from clunky software for typing on the touch screen to the device’s sluggish performance with basic tasks like dialing-by-voice or taking photographs.

“I found myself wanting to throw it in the ocean due to my frustration with its overall usability,” said Steven Golub, a longtime Verizon customer from Morristown, N.J., who bought the Storm the day it was released, but returned it a few weeks later.

Verizon (VZ) stock amidst a decent overall quarter missed forecasts today pushing the stock down 3% in above average volume trade. Marketwatch breaks down the results:

In the final three months of 2008, meanwhile, Verizon posted net income of $1.24 billion, or 43 cents a share, up from $1.07 billion, or 37 cents a share, in the same period a year earlier.

Adjusted to exclude onetime costs and benefits, Verizon (VZ) said it would have earned 61 cents a share, compared to 62 cents a year earlier.

On that basis, the carrier just missed Wall Street’s forecast. Verizon was expected to earn an adjusted 62 cents a share on revenue of $24.7 billion, according to the consensus of analysts surveyed by FactSet Research.

A quick look at Verizon’s stock chart reveals that is has broken down through a key trading range and now also lies below its 50 day moving average. As of 2:00 PM EST the stock was trading at about $30 a share, down just over 3% for today’s session.

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On the other hand Research in Motion’s stock has held up very well and has even posted nice returns for investors here in early 2009. Today RIMM stock is up nearly 6.5% in brisk trading mid afternoon. There is no major news driving today’s positive price action.

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