Vodafone Sales Beat Estimates On Enterprise Growth
Vodafone Group Plc reported higher sales in the third fiscal quarter than expected as sales to corporate customers accelerated, easing pressure on the mobile operator after it rejected a bid to merge its Italian business with Iliad SA.
(Bloomberg) -- Vodafone Group Plc reported higher sales in the third fiscal quarter than expected as sales to corporate customers accelerated, easing pressure on the mobile operator after it rejected a bid to merge its Italian business with Iliad SA.
Overall organic service revenue rose 4.7% to €9.38 billion ($10.1 billion) in the period that ended in December, the UK-based telecommunications company reported on Monday. That compares to the 4.3% average estimate by analysts in a Bloomberg survey.
Service revenue growth from Vodafone Business grew 5% from a year ago to €2.62 billion, the company said, after the company won new projects and customers. Contract wins included a contract to provide connectivity to the UK’s smart meter network and to offer 5G services to SNAM, an Italian natural gas transportation company.
Vodafone is seeking to sell assets in a number of struggling European markets as part of Chief Executive Officer Margherita Della Valle’s turnaround strategy. While it rejected Iliad’s offer, regulators cleared the sale of its Spanish unit to Zegona last week. Vodafone didn’t give an update on its Italian talks in Monday’s statement beyond saying that it is exploring options for in-market consolidation, though there’s no certainty a deal will be reached.
What Bloomberg Intelligence Says:
odafone’s 4.7% organic service revenue-growth beat of 4.3% consensus helped management reiterate full-year targets, with Turkey (4% of sales) a key driver, but a high currency risk. Acceleration in Business (27% of sales) led its 3Q beat, but a turnaround in Vodafone’s key market Germany looks slow with limited improvement in broadband net losses and no change in the expected drag from TV regulation.
— Erhan Gurses, BI telecoms analyst
The UK antitrust watchdog announced an investigation last month into the company’s plan to combine with CK Hutchison Holdings Ltd.’s Three in a move that would create the country’s largest mobile operator. Vodafone said on Monday that it expects the deal to close around the end of calendar 2024.
Vodafone shares rose 2% to 68.60 pence on Friday. The stock had declined 28% in the 12 months through Friday.
(Corrects spelling of CEO’s name in fourth paragraph)
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