Vodafone Group shares plummeted 14% after the mobile phone company scaled back its full-year sales forecast as tough economic conditions led consumers to refrain from buying and using new handsets, an Associated Press report said.
Vodafone said it now expects revenue to be at the bottom of its 39.8 billion pound ( â‚¬49.8 billion, $79.8 billion) to 40.7 billion pound ( â‚¬51 billion, $81.6 billion) range, dragging the telecommunications sector lower and casting a shadow over the last set of results presided over by outgoing CEO Arun Sarin, the report said.
'Telecoms results, globally, have shown remarkable resilience to date to the economic slowdown, but Vodafone has kicked off the telco results season with a reminder that nothing is immune,' Collins Stewart analyst Mark James, quoted by the report, said.
Vodafone, the world's biggest mobile phone provider by sales, was the biggest loser on the London Stock Exchange midmorning Tuesday, down 14.1% lower at 128.2 pence ( â‚¬1.6, US$2.56).
In its first quarter trading update, Vodafone said that revenue rose just 1.7% to 9.8 billion pounds ( â‚¬12.3 billion, US$19.6 billion) in the three months to June 30.
The company said its Spanish operations took a hit from falling customer spending and fierce competition while voice revenues in Britain were depressed by the darkening economic climate.
Excluding the impact of currency exchange rates, acquisitions and disposals, revenue actually fell slightly in Europe _ something the company attributed in part to tightening margins on voice communications and reduced roaming charges mandated by the EU.
Sarin, who is due to be replaced by his deputy Vittorio Colao next week, said that the company's focus on cost reduction would support its operating profit for the full year 'notwitstanding this more challenging operating environment.'