Vodafone Shares Fall on Weak German Performance
Vodafone Group Plc's shares declined following the release of its fiscal third-quarter results, revealing a further deterioration in its German operations.
German Weakness
Organic service revenue in Germany dropped by 6.4% during the quarter, exceeding analysts' estimates of a 5.3% decline. Vodafone anticipates lower earnings in the second half of the year due to a "more challenging" mobile market.
Turnaround Challenges
CEO Margherita Della Valle continues to face difficulties in revitalizing the company's share price. Despite implementing key elements of her turnaround plan, German performance remains a persistent concern.
Regulatory Headwinds
A law prohibiting housing associations from bundling TV packages with rent has significantly impacted Vodafone, resulting in the loss of half its TV customers. The company expects this impact to continue until the next fiscal year.
Mixed Results
Overall, Vodafone's group organic service revenue increased 5.2% in the quarter, exceeding expectations. However, increased competition in the German mobile market is weighing on profitability.
Reiterated Guidance
Vodafone reaffirmed its full-year guidance, citing positive results in the UK, Turkey, and African markets. However, analysts remain cautious, believing that turnaround in Germany is crucial for sustained financial improvement.