Vodafone Group PLC reported a smaller decline in service revenue in the second fiscal quarter boosted by growing demand in Europe.
The British group stated a service revenue decline of only 1.5% for the second quarter, beating analysts projections for a 2.8% decrease and its Q1 performance of a 4.2% drop. The company recovered after six quarters of 4% and 5% falls thanks to improved commercial performance.
Vodafone said it enjoyed gains in service revenue, funds from customers’ plans and traffic on its network, across all of its key markets, including Germany, Italy, U.K., Spain and its biggest growth of 13.2% in India.
The company said its two-year £19-billion Spring investment program, which aims to improve Vodafones network, is “well underway” and consumers have begun to enjoy wider 3G and 4G data coverage, improved voice quality and reliability, and increased access to next generation fixed line services.
“Our network initiative and focus on quality is starting to be more visible, and there is a general improvement in some of the market conditions” said CEO Vittorio Colao on a call with reporters.
The worlds second-biggest mobile operator reported group service revenue for the six months ended September 30 of £19.14 billion, including a 5.7% increase in Africa, Middle East and Asia Pacific, compared to 2.8% in the previous period.
Vodafone changed its full-year guidance for core earnings to be between £11.6 billion and £11.9 billion, up compared with its previous projection of between £11.4 billion and £11.9 billion.
“We have made encouraging progress during the quarter,” said Mr. Colao. “There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data.”
Vodafone said it would enter the UK residential broadband market for the first time in 2015 via the network of Cable & Wireless Worldwide, which the company acquired three years ago. The move into Britains market is aimed to take on BT Group, and counter its mobile launch later this year.
Vodafone Group PLC gained 0.43% on Monday and closed at GBX 207.85 in London. The stock gained 5.75% by 10:26 GMT on Tuesday to trade at GBX 219.80, marking a one-year decrease of 5.67%. The company is valued at GBP 55.09 billion. According to the Financial Times, the 24 analysts offering 12-month price targets for Vodafone Group PLC have a median target of GBX 229.50, with a high estimate of GBX 270.00 and a low estimate of GBX 130.00. The median estimate represents a 10.42% increase from the last close price of GBX 207.85.
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