Vodafone quarterly revenue jumps 19% to £ 9.8 bn

Vodafone quarterly revenue jumps 19% to £ 9.8 bn

Vodafone Group PLC Tuesday said it expects full year sales to be at the low end of the guidance range provided at its full year results, even as the company reported first quarter sales up 19.1%. The world's largest mobile operator by revenue attributed the lowered expectations to its first quarter performance, recent economic weakness and lower-than-expected equipment revenue. The group reported sales in the three months to June 30 rose to GBP9.82 billion from GBP8.25 billion, just ahead of analysts' average expectations of GBP9.81 billion.

The company's sales were once again buoyed by growth in the emerging markets regions as well as data revenue, offsetting weakness in its Spanish operations which have suffered from a weak economy and strong competition. However the group said it now expects sales at the bottom of the full-year gudiance range of GBP39.8 to GBP40.7 billion, although it reiterated operating profit and cash flow guidance following its cost reduction measures.

The group continues to expect adjusted operating profit in the range GBP11.0 billion to GBP11.5 billion and free cash flow of GBP5.1 billion to GBP5.6 billion. In the first quarter Vodafone sales from its Emerging Markets, Asia Pacific and Affiliates (EMAPA) division rose 30.5% to GBP2.64 billion, driven by revenue growth of 50% in India.

In Europe sales rose 15.5% to GBP7.18 billion driven by strong foreign exchange, although on an organic basis revenue shrank 0.2%. Vodafone said its results are also likely to continue to benefit from foreign exchange movements. "Notwithstanding this more challenging operating environment, we continue to benefit from a diversity of assets and services, with strong revenue growth in EMAPA and another good quarter of data revenue growth offsetting weakness in Spain," said chief executive Arun Sarin.

Vodafone's mobile customer base in the quarter rose by 8.5 million to 269.0 million. Vodafone's shares closed Monday at 149 pence, having fallen around 20% since the start of the year. Investors in the sector have been concerned about the impact of European Union regulatory moves to cut mobile termination rates and roaming fees.