Earnings: Vodafone Meets Expectations; Warns Slowing Economy Will Hit Sales

Vodafone (NYSE: VOD) posted an interim management statement for the first quarter ending 30 June 2008 today. Revenues were in line with analyst expectations at 9.8 billion pounds ($19.57 billion). Overall, data revenue was up 50.6 percent to £664 million ($1.33 billion) compared to £441 million ($884 million) year on year. Stripping out acquisitions and disposals, data revenue grew 29.4 percent. But the global carrier warned that full year revenue would be at the low end of its earlier guidance of 39.8 billion pounds ($80 billion) to £40.7 billion pounds ($81.5 billion), which it blamed on the gloomy economic outlook, and falling equipment sales.

Highlights Include:

Group Voice Revenue Fell: Voice revenue fell by 3.6 percent on an organic basis compared with the same quarter last year. The carrier blamed lower per minute rates, brought on by pricing initiatives, as well as regulations forcing down termination rates and roaming prices.

Group Data Revenue Up: Rising penetration of mobile broadband dongles and PC cards as well as improved service offerings (messaging bundles, for example) help drive up group data revenue. As of 30 June 2008, Vodafone had 6.7 million customers connected to the mobile internet either through handheld business devices or mobile dongles, an increase of 105.4 percent year on year. Dongles are doing especially well among consumers.

Spain Particularly Hard Hit: Spain’s service revenue declined by 2.5 percent, compared with 5.1 percent organic growth for the previous quarter. The carrier blamed the ” recent deterioration of the macro economic environment” as well as increased competition from rival Telefonica (NYSE: TEF) and MVNOs.

Messaging Revenue in Europe Mixed: Messaging revenue grew 2.2 percent on an organic basis, compared with the same period a year ago. Regionally, messaging revenue was a mixed bag, which Vodafone attributed to