Vodafone reports $1.18 negative EPS; revenue reaches $12.38 billion

By Marcus Bennett

A $1.18 negative quarterly earnings per share (EPS) left Vodafone Group $1.79 below the $0.61 consensus. Revenue of $12.38 billion compared with the $25.32 billion analyst estimate, less than half the forecast. Vodafone published the results Tuesday, but the sales gap increases the importance of cost execution for cash generation.

What changed in FY2027 guidance?

FY2027 guidance rose. The midpoint now implies about 7% organic (excluding portfolio changes) growth in Adjusted EBITDAaL (earnings before interest, tax, depreciation, amortization and lease liabilities) and 21% adjusted free cash flow growth (cash after capital expenditure and exceptional-item adjustments). The higher target supports cash expectations, although the revenue miss makes operating execution more important.

First-half momentum strengthened as Q2 service revenue growth accelerated to 6.4%, while Vodafone Business grew 6.6%. Africa and Türkiye delivered double-digit organic growth, giving management additional operating evidence behind the higher FY2027 midpoint.

Where do costs and legal risks remain?

More than €200 million in gross savings in the first half gave Vodafone a measurable start. The company expects more than €200 million in net operating expense (OpEx) savings this fiscal year and is working toward more than €1 billion in annual net savings by FY2030. These figures strengthen cash expectations, but delivery still depends on operating execution.

Germany remained a challenge despite improving broadband and business-to-business (B2B) trends. The European Court of Justice (ECJ) ruling cut first-half EBITDA by about €100 million, while Vodafone booked a non-cash impairment (an accounting write-down without an immediate cash outflow) and announced another 2,300 role reductions.

Vodafone’s increased Safaricom stake faces a legal challenge in Kenya. The company said the court was fast-tracking the appeal and had maintained the status quo (existing conditions) while proceedings continued. The interim arrangement limits immediate disruption but leaves unresolved risk around a strategically important African asset.

How did shares and analysts react?

Shares traded 1.8% lower on Tuesday, falling $0.28 to $15.40 during trading hours. Volume reached 1,203,871 shares, below the average of 4,080,334. The price also sat below the 50-day moving average of $16.33 and the 200-day average of $15.43.

• Liquidity and leverage: Quick ratio of 1.11; current ratio of 1.14; debt-to-equity ratio of 0.84.
• One-year range: A low of $11.71 and a high of $17.71.

Five research houses recently assessed the stock, with ratings spread across all three main categories. Their decisions and dates were:

• DZ Bank restated a “neutral” rating in a research report on Monday, Aug. 17.
• Morningstar cut its rating to hold in a report on Thursday, July 30.
• Weiss Ratings downgraded the stock from hold (c) to hold (c-) in a research note on Friday, Oct. 30.
• Goldman Sachs upgraded the stock from “sell” to “buy” in a research note on Friday, Sept. 4.
• Wall Street Zen lowered the stock from buy to hold in a report on Tuesday, Sept. 22.

Four analysts assign a Buy rating, four assign Hold and four assign Sell. MarketBeat lists a consensus rating of Hold and a $13.13 target, below Tuesday’s $15.40 trading price.

Vodafone Group is a telecommunications company headquartered in the United Kingdom. It provides mobile and fixed-line connectivity, broadband, voice and data services to consumers, businesses and public-sector organizations. Its portfolio also includes business technology services, such as Internet of Things (IoT) connectivity and digital solutions.

Operations span Europe and Africa, with Vodacom serving as a major part of the African business and partner networks extending service in other markets. Vodafone traces its roots to Racal Telecom, established in 1984 and independent in 1991.

Taken together, Vodafone enters the next reporting phase with higher FY2027 targets and quantified savings, alongside weak reported sales, German charges and Kenya litigation. The next test is whether operating growth can convert stronger guidance into reported revenue without further regional charges.