1019 Friday 25 January 2019
This morning Vodafone reported a slowdown in their key revenue measure for the third quarter to 0.1% compared with analyst expectations of 0.3%. The fall was blamed on price competition in Italy and Spain plus a fall in business in South Africa. However, the company does see signs of improvement and has therefore maintained its guidance for the full year. Vodafone are expecting a 3% growth in underlying earnings with an approximate free cash flow of around €5.4bn for the year.
Speaking on the slowdown on the European side, Chairman Nick Read was quoted as saying “Lower mobile contract churn across our markets and improved customer trends in Italy and Spain are encouraging, however these have not yet translated into our financial results”.
In early trading this morning, VOD.L has fallen 2.21%, currently sitting at 140.84
In other news today, Vodafone announced that it was ‘pausing’ the deployment of Huawei infrastructure due to uncertainty surrounding security issues involving the Chinese firm. Huawei has recently seen its services banned in several Western countries on suspicion of spying due to its connection with the Chinese government. Were Vodafone to perform a complete rollout of Huawei technology they may find trouble entering certain territories, hence their stance today.
Despite the third quarter slowdown, Nick Read’s bullish views for the company’s full year and views of improvement may make investors consider buying or adding to their positions.
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