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Mixed Vodafone report

November 11, 2014

British mobile operator Vodafone has raised its full-year forecast for core earnings, citing encouraging progress made in its first second quarter ending September. But acquisition costs ate into profits.

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Vodafone logo
Image: REUTERS

Vodafone's earnings plunged in the first half of its fiscal year, the company said Tuesday, citing lower one-off tax gains and costs linked to a series of acquisitions.

The British group said net profit dived by 70 percent year-on-year in the six month ending September 30, standing at 5.4 billion ($8.6 billion, 6.9 billion euros).

Despite the half-year profit slump, the world's second largest mobile operator said it expected its full-year core earnings to be between 11.6 billion pounds and 11.9 billion pounds, compared with the previous guidance of between 11.4 billion pounds and 11.9 billion pounds.

Improved network infrastructure

"There is growing evidence of stabilization in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data," CEO Vittorio Colao said in a statement.

After selling its 45-percent stake in US rival Verizon Wireless last year, Vodafone has been investing some of the proceeds in new and faster 4G networks to satisfy customers' growing hunger for data.

New ways of communicating

But the drive has come against the backdrop of cut-throat competition as operators battle weak demand in some struggling southern European economies.

hg/sgb (AFP, Reuters)