Talking of nerves, this morning it was Vodafone’s turn to spook the markets. The word bottom did it, and no matter how hard its outgoing chief exec Arun Sarin revealed a positive gloss on the latest Vodafone figures, investors just didn’t like it.
The company now reckons full year revenue will be “around the bottom” of the range previously stated.
Note that. The company did not say revenue would be less than expected, merely not as good as it thought it might be if things had gone swimmingly well.
Mr Sarin said, “Our continued focus on cost reduction enables us to reiterate our operating profit and cash flow guidance for the year.”
So that’s good and bad. It’s good the company is able to reduce costs, but markets don’t like it when profits are preserved by cost reduction. You can’t keep cutting costs, after all.
Mr Sarin went on to talk about a “challenging operating environment,” but struck a bullish note on sales in Eastern Europe, Middle East, Asia Pacific and affiliates.
Last year it bought a big stake in Hutchison Essar, the third largest network in India, and is in talks to buy into the Bangladesh market.
All in all, considering how miserable corporate news has been of late, not a bad statement. Even so, shares plunged by 10 per cent all the same.
Markets are like that that right now. Nerves are as taut as a tightrope.
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