Telecom company Vodafone (VOD) said it was on track to meet its raised 2022 earnings guidance following a positive third quarter trading update, giving the shares a 2% boost to 130.8p.
The telco giant, in which activist Cevian Capital has built a stake, reported a 2.7% rise in third quarter group service revenue to €9.64 billion, up from 2.4% in the second quarter, with growth in both Europe and Africa.
Total revenues for the three months through December increased to €11.68 billion, up from €11.20 billion year-on-year.
The company reaffirmed that full year adjusted earnings before interest, tax, depreciation and amortisation was still expected to be between €15.2 billion and €15.4 billion, with adjusted free cash flow of at least €5.3 billion.
SHARPENED FOCUS
Investment director at AJ Bell, Russ Mould commented: ‘There is a big emphasis in its latest update on how it is trying to make more money from Germany, speed up its transformation in Spain and be ready to capitalise on the EU recovery fund.
‘These are the kind of things that investors will want to hear, though activist Cevian Capital may argue that it’s all talk and not enough action.
It could be time for Vodafone to speed up its value generation efforts, and one way is to sharpen its focus on fewer areas rather than have fingers in so many pies.’
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Investment platform AJ Bell, referenced in this article, owns Shares magazine. The author of this article (Martin Gamble) and Steven Frazer, who edited the piece, own shares in AJ Bell.
