Vodafone reported mixed financial numbers for the for the six-month
period ended Sep 30, 2014. Adjusted earnings per share declined
46.5%, while revenues increased 8.9% year over year on a reported
basis. The year-over-year increase in revenues was primarily driven
by an 18.6% jump in sales from the European region. However,
Vodafone's move to expand wireless services in emerging markets and
the 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 benefit the financials.
Going forward, we expect the continuous investments in project
Spring and the underlying economic weakness in Europe to act as
headwinds for the company. Hence, we maintain our Neutral
recommendation on Vodafone.
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
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