EARNINGS PREVIEW: Vodafone Fiscal Year Revenue Seen +6.3% At GBP31.2 Billion

LONDON -(Dow Jones)- Twelve months after a number of high-profile investors questioned Vodafone Group Chief Executive Arun Sarin's strategy - or lack of one - for revenue growth in Western Europe, the company is expected Tuesday to come in near the higher end of company forecasts, reporting a 6.3% rise in fiscal year group revenues.

In what has been a roller-coaster year for the world's largest mobile phone operator by sales, Vodafone has also won over many cynics by pushing into high-growth emerging markets such as India, where it has acquired a controlling stake in Hutchison Essar Ltd. for $10.9 billion.

But even though the Newbury, England-based operator is expected to report that fiscal-year revenues rose to GBP31.2 billion from GBP29.35 billion, analysts will be looking closely at 2008 guidance and signs of how Vodafone is performing in Europe, where pricing pressures still bite hard.

"Guidance for 2008 will be the key thing analysts will be looking for," said ING analyst Damian Chew. "Part of that guidance will be on the new European Union roaming charges, but the other focus will be its plans now in India."

"The German price war continues and regulatory pressures continue in Italy," he said.

Earlier this week the European Parliament voted to require cuts in the cost of using a mobile phone abroad, with the cost of making a call within the E.U. dropping to less than 33 pence a minute by August. Currently mobile operators decide the prices they charge.

With Europe expected to remain tough, much of Vodafone's growth is expected to come from emerging markets, including Africa, where it has its 50:50 Vodacom joint venture with South Africa's Telkom. Citigroup analyst Terence Sinclair said he still expects Vodafone to extend its presence in emerging markets by acquiring the remaining 50% of Vodacom for GBP5.2 billion some time in the not so distant future.

Verizon Wireless, Vodafone's North American joint venture, and Vodafone Egypt have already reported strong figures.

Earnings before, interest, tax, depreciation and amortization are forecast up 1.6% at GBP11.95 billion from GBP11.76 billion, while operating profit is expected to rise 0.5% to GBP9.45 billion from GBP9.4 billion.

Company Web site: http://www.vodafone.com

-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 25th May 2007