We maintain our Neutral recommendation on Vodafone. While the
company has significantly gained from its operations in emerging
markets and Vodacom, subdued performance in Europe, in particular
Italy has been a drag on Vodafone's fiscal 2014 results.
Consequently, the company's top and bottom line performance
significantly deteriorated year over year. Going forward, we expect
the continuous investments in project Spring and the underlying
economic weakness in Europe to act as headwinds for the company
going forward. However, Vodafone's move to expand wireless services
in emerging markets and promotion of M-Pesa in Africa and Europe
will remain accretive for future growth. Further, key acquisitions
and the divestiture of Verizon Wireless stakes are also likely to
prove favorable for the financials.
Based in Newbury, United Kingdom, Vodafone Group Plc (VOD) is
the world's largest revenue generating wireless communications
operator and the second largest (behind China Mobile) carrier based
on subscriber count. The company offers an array of products and
services, including voice, messaging, data and fixed-line solutions
and devices as per customers' communications needs.
Vodafone operates independently and through affiliates, notably
under the Vodafone brand name. Vodafone is the leading wireless
operator in the U.K. and has a major presence in Europe, the Middle
East, Africa and Asia Pacific. Vodafone owned 45% of Verizon
Wireless, the largest U.S. wireless service provider prior to sale
of its interest to Verizon Communication on Feb 21, 2014. With the
purchase of Hutchison Essar (now Vodafone Essar) in fiscal 2007 for
5.5 billion ($11 billion), Vodafone became a one of the leading
provider of wireless service in India. In Apr 11 2014, Vodafone
acquired an additional 10.97% stake in its Indian joint venture
Vodafone India from partner Piramal Enterprises Ltd. for INR
101.418 billion ( 1 billion). This led to full takeover of its
Effective Oct 1, 2013, Vodafone merged its Northern &
Central Europe and Southern Europe regions into one Europe region.
The company reports operating results of Turkey within the Africa,
Middle East and Asia-Pacific region due to the country's emerging
The Africa, Middle East and Asia Pacific (AMAP) region includes
the company's interests in Egypt, India, Ghana, Kenya, Qatar,
Vodacom and Turkey. Vodafone also benefits from interests in
Australia, New Zealand and Fiji.
Europe region includes Vodafone's operation in Germany, the UK,
the Netherlands, the Czech Republic, Hungary, Ireland and Romania,
Italy, Spain, Greece, Portugal, Albania and Malta.
On Oct 31, 2012, Vodafone acquired TelstraClear Limited, the New
Zealand business of Telstra Corporation for NZ$840 million ( 429
million) in a cash consideration. The acquisition is expected to
remain accretive to the company's fixed communications business and
strengthen the market position for its operations in New
Vodafone Group PLC ADS (VOD): Read the Full
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