Vodafone Group plc (LON: VOD) was seen trading up 10% today after reporting a decline in its fiscal 2023 earnings.
Vodafone shares fall on weak guidance
The telecoms giant said on Tuesday that its adjusted EBITDA fell 1.0% to 14.67 billion euros ($15.95 billion) in the year ended March 31.
Energy spending and weaker business, especially in Germany, he said, helped revenue rise just 0.3% to 45.71 billion euros. By comparison, analysts were at 14.73 billion euros and 45.52 billion euros, respectively.
For this year, Vodafone expects its adjusted EBITDA to remain stable at EUR 13.3 billion and its cash flow to drop significantly to EUR 3.3 billion. Its Spanish business is also currently under strategic review.
Vodafone shares are now down 20% compared to their year-to-date high at the time of writing.
Vodafone bets on cost reduction
On the plus side, Vodafone confirmed it is committed to slimming down.
Today, the British multinational revealed plans to cut 11,000 of its workforce in a bid to cut costs. In the press release, its CEO Margherita Della Valle said:
Our performance has not been good enough. To deliver consistently, Vodafone has to change. My priorities are the customer, simplicity and growth. We will reallocate resources to provide our customers with the quality service they expect.
The board declared a final 4.5 euro per share dividend on Tuesday. Despite the weak results, Wall Street currently has an “overweight” rating on Vodafone shares and sees them up about 40% on average from here.