Vodafone share price slides as telco reports drop in revenue

on Jan 25, 2019
Updated: Mar 11, 2020
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Shares in Vodafone (LON:VOD) have fallen into the red in today’s session, as the blue-chip telco posted a drop in revenue for the third quarter of its financial year. The company has further cautioned that the adoption of new accounting standards will weigh on its earnings for the full year.

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As of 08:59 GMT, Vodafone’s share price had given up 1.20 percent to 142.31p. The group’s shares are underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.50 percent higher at 6,853.04 points.

Vodafone posts Q 3 results

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Vodafone announced in a statement this morning that its revenue had fallen by €800 million to €11 billion in the quarter ended December 31, pressured by the adoption of IFRS15, the sale of the telco’s stake in its Qatar business as well as currency headwinds.

“We have executed at pace this quarter and have improved the consistency of our commercial performance,” the telco’s chief executive Nick Read commented in the statement, adding that the company was “moving to implement a radically simpler operating model and to accelerate our digital transformation”.

Telco updates on FY outlook

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For the full year, the telco confirmed its expectation that organic adjusted EBITDA on an underlying basis (excluding settlements and UK handset financing, IAS 18 basis) will grow by around three percent, with free cash flow generation (pre-spectrum) of around €5.4 billion.

Vodafone, however, noted that under the IFRS 15 accounting standard, it expects its organic service revenue growth to be slightly higher and its absolute adjusted EBITDA to be slightly lower, primarily due to the elimination of the impact of UK handset financing under IAS 18, with no impact on free cash flow.

Today’s results come after earlier this week, Vodafone announced plans to strengthen its partnership with Telefonica (O2).

As of 09:10 GMT, Friday, 25 January, Vodafone Group plc share price is 142.20p.

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