Verizon said today that it added 1.4 million net new wireless customers, excluding acquisitions and divestitures. That missed the 1.53 million projection of JPMorgan Chase & Co. analyst Mike McCormack. The company also sold about 1 million BlackBerry Storms in the period.

Some customers are shying away from new phones and seeking cheaper calling plans to shield themselves from the recession. Verizon, which surpassed AT&T Inc. as the biggest carrier after buying Alltel Corp., also is limiting spending on projects such as network upgrades, Chief Financial Officer Doreen Toben said in an interview.

“You really are seeing a slowdown in the wireless business,” Macquarie Capital USA analyst Philip Cusick said in an interview. People may be getting rid of lines for their children or switching to service without a contract, he said.

More than half the new subscribers at MetroPCS Communications Inc., the Dallas-based pay-as-you-go carrier, came from larger nationwide phone companies last quarter, Chief Financial Officer Braxton Carter said in an interview.

Verizon dropped $1.18, or 3.8 percent, to $29.81 at 2:32 p.m. in New York Stock Exchange composite trading. Earlier the shares fell as low as $28.96, the biggest decline since Jan. 5.

Data Services

Net income climbed to $1.24 billion, or 43 cents a share, New York-based Verizon said today. Sales rose 3.4 percent to $24.6 billion, meeting analysts estimates.

Revenue from services such as Web-surfing and text- messaging, available on phones like the Storm, climbed 41 percent, boosting Verizons most profitable business. The New York-based company, which introduced the phone in November, might have sold more if inventory hadnt been limited, spokeswoman Brenda Raney said.

Revenue from the wireless division advanced 12 percent to $12.8 billion, accounting for more than half of total sales. Sales in the wireline unit dropped 2.7 percent as customers switched to mobile phones or service from cable operators.

Analysts anticipated fourth-quarter sales of $24.7 billion on average, according to a Bloomberg survey. Excluding costs to integrate new businesses and fire workers, earnings were 61 cents per share, also matching projections. Last years fourth-quarter profit was $1.07 billion, or 37 cents.

The company declined to give a forecast for this year amid mounting job losses and pricing pressure from business customers. AT&T and Sprint Nextel Corp., the second- and third-largest mobile-phone carriers, announced a total of 20,000 job cuts in the past two months as they struggle to save cash.

“To state the obvious, 2008 was a difficult economic environment, and there is more than the usual uncertainty as we try to plan for 2009,” Chief Executive Officer Ivan Seidenberg said on a conference call.

On Jan. 9, Verizon completed the acquisition of Alltel, which had almost 14 million customers. Verizon will begin reporting combined earnings this year. Verizon co-owns the Verizon Wireless mobile-phone business with Newbury, England- based Vodafone Group Plc.

FiOS, Verizons fiber-optic Internet and television service, added record subscribers in the quarter after the carrier built out the network in New York, its biggest market yet. Verizon is spending $23 billion to build out TV and Internet over seven years to compete with packages from cable companies.

“This is not good news for the cable industry,” said Stifel Nicolaus & Co. analyst Christopher King, based in Baltimore. “The higher the penetration levels get, the better the financial case for the company is at the end of the day.”

The company added 303,000 television customers and 282,000 Internet subscribers, helping to boost those customers average bills 14 percent from a year earlier to $68.46. The company had 1.9 million FiOS TV customers and 2.5 million Internet customers at the end of 2008.

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