Motorola Mobility (MMI) Crushed on Pending Verizon (VZ) iPhone Competition

January 27, 2011 9:00 AM EST
Get Alerts MMI Hot Sheet
Price: $25.32 -0.82%

Rating Summary:
    4 Buy, 26 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Shares of Motorola Mobility (NYSE: MMI) are down 9 percent to $31.84 in premarket trade on Thursday following the company's fourth-quarter results.

While the company posted a slight beat in its first quarter as a separate company, it also admitted pending downward catalysts from the Verizon (NYSE: VZ) launch of the Apple Inc. (NASDAQ: AAPL) iPhone.

Motorola Mobility sees a loss of 9-21 cents per share for the first quarter, below the market consensus of breakeven.

The company is set top launch several new products this quarter, with the Atrix smartphone and Xoom tablet by the end of February, which will compete directly on Verizon and AT&T Inc. (NYSE: T) with Apple.

"Motorola continues to launch impressive products. The company launched 23 smartphones last year and have already introduced four new smartphones this year," Deutsche Bank analyst Brian Madoff said. "We are still concerned about the Verizon’s iPhone launch and what that means for the company’s smartphone share at that carrier."

Hudson Securities sees the upcoming product line from Motorola to strong to deny, as the firm maintained a Buy rating the stock and raised its price target from $35 to $38.

Hudson Securities analyst says, "We continue to believe that MMI represents a leader in the wireless handset market. The company continues to release new and exciting products to the market and has improved its cost structure. We felt there were 2 events that could weigh on the valuation of the shares; the official announcement of the Verizon iPhone and the possibility of Street expectations being lowered for 1Q10. With both of these events now behind us, we feel that the prospects for the remainder of 2011 are positive."

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