Vodafone cuts outlook as economic woes mount

STORY: Vodafone was forced to cut its earnings outlook on Tuesday (November 15).

The British group blamed higher energy costs and weaker performance in key markets like Germany, Italy and Spain.

Vodafone cut its cash flow forecast by about $208 million, down to $5.3 billion.

The firm also said its adjusted core earnings would be lower than an earlier target of up to around $16.1 billion.

Chief Executive Nick Read said the European mobile operator had taken steps to navigate the 'challenging economic environment'.

He said energy costs, inflation and price rises in Europe were key issues.

Shares in the group dropped close to 8% after the update.

In its first six months, Vodafone reported a 2.6% decline in adjusted earnings.

It blamed that on struggles in its biggest market Germany.

Its performance in Italy and Spain also worsened quarter-on-quarter.

That was driven by intense competition in the value segment of both countries' mobile markets.

Britain was a bright spot, though.

Service revenue there strengthened due to consumer price rises and a return to growth in the business segment.