Vodafone shares fall 9% after house broker cuts forecasts
Shares in Vodafone, the mobile telephone giant, fell 8.6 per cent yesterday after UBS Warburg, the house broker, downgraded its 2001 profits forecast.
Shares in Vodafone, the mobile telephone giant, fell 8.6 per cent yesterday after UBS Warburg, the house broker, downgraded its 2001 profits forecast.
The downgrade - in which the broker stated that its earnings forecast would be reduced by 0.5 to 1.5 per cent - caught the market on the hop. However, it appeared to have been prompted by last-minute housekeeping before half-year results on 14 November, rather than any new information suggesting that a major earnings upset was in the pipeline.
Daniel Stillit at Warburg, said: "The market is incredibly fragile because of everything that's happened in the last few months. It has mixed this [downgrade] up with something else. This is a simple, trivial, adjustment."
Mr Stillit said his revision was a result of stronger-than-expected German subscriber figures, out earlier this week. He said the news caused him to increase, by 3 per cent, his forecast revenues for Vodafone's German mobile phone business for the year to 31 March 2001. But, because of the high up-front costs of taking on new subscribers, it would affect earnings. "To interpret this negatively would be a serious misunderstanding of the cellular market," he said.
The market became nervous earlier this week when Investec Henderson Crosthwaite trimmed its forecast. Vodafone, headed by Chris Gent, yesterday denied it had given any fresh guidance to analysts.
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