Vodafone share price slides as group expects to meet ‘lower end’ of guidance

on Feb 2, 2017
Updated: Oct 21, 2019
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Shares in Vodafone (LON:VOD) have retreated more than one percent in early morning trade in London today, as the blue-chip telco cautioned that it expects to meet the lower end of its earnings guidance. The company has pointed to pressures in the UK and India where the group is battling increasing competition.

As of 08:40 GMT, Vodafone’s share price had lost 1.35 percent to 190.40p, underperforming the benchmark FTSE 100 index which has climbed marginally higher and is currently 0.22 percent better off at 7,123.17 points. The telco’s shares have lost more than 14 percent of their value over the past year, and are down by some four percent in the year-to-date.
Vodafone announced in a statement this morning that it expects to deliver organic earnings before interest, taxes, depreciation and amortisation (EBITDA) growth at the lower end of its guidance of between three and six percent. The update came as the blue-chip telco posted its third-quarter results revealing that its total revenue had dipped by 3.9 percent to €13.7 billion, including a four percentage point negative impact from foreign exchange rate movements.

The company saw its service revenue at home fall 3.2 percent during the reported period, pressured by increasing competition and continued impact of roaming regulation. Vodafone’s performance was also subdued in India where service revenue declined by 1.9 percent, driven by heightened competitive pressure following free services offered by new entrant Jio. Earlier this week, the blue-chip telco revealed that it was in talks to merge its Indian subsidiary with local rival Idea Cellular.

“We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions,” the FTSE 100 group’s chief executive Vittorio Colao commented in the statement.
Proactive Investors quoted analysts at Haitong Research as forecasting that their “consensus forecasts will likely inch down after today”.
“We remain cautious about VOD’s prospects, at the current share price level,” the pointed out in a note to clients as their reiterated their ‘neutral’ stance on the blue-chip telco.
As of 08:57 GMT, Thursday, 02 February, Vodafone Group plc share price is 190.12p.

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