Shares in Vodafone fell by over 7% after its operating profit dropped by 52.7% year-on-year to €500m in Q3.

The British telecoms company said this was a result of M&A, which included the temporary non-cash accounting impacts of its Indian simplification activities.

In its Q3 trading update, Vodafone reported 6.5% revenue growth to €10.5bn, due to strong growth in Africa and the consolidation of its Three UK and Telekom Romania assets. This was partially offset by foreign exchange movements.

In the UK, its organic service revenue fell by 0.5% after a jump of 1.2% in the previous quarter. Vodafone said this was expected and reflected the previously flagged prior year one-off project revenue in business.

Revenue growth in Germany, Vodafone's largest market, increased by 0.1% year-on-year to €3.1bn, and was supported by higher wholesale revenue.

Group chief executive at Vodafone, Margherita Della Valle, said: "We maintained good service revenue momentum in the third quarter across both Europe and Africa, supported by top-line growth in Germany, and strong contributions from Türkiye and Africa. After a fast start, we are making very good progress with the integration of our UK business.”

Vodafone has also now completed €3.5bn of share buybacks since May 2024 and its next €500m tranche has commenced.

In its outlook for the 2026 financial year, it reiterated guidance of reaching the upper end of its earnings range between €11.3bn and €11.6bn, with free cash flow of between €2.4bn and €2.6bn.

Although recent updates had given investors hope, investment director at AJ Bell, Russ Mould, said Vodafone's latest announcement offered a "serving of schadenfreude".

He concluded: "This overshadowed a more robust performance elsewhere and raised questions about whether the regulatory-driven issues in the German market were truly behind the company. If November’s first dividend hike in seven years gave a signal that Vodafone’s recovery, following years of stagnation, was finally in motion that signal feels patchier today.

"Vodafone may still be on track to deliver full-year profit and cash at the upper end of guidance, and the integration of Three UK may be progressing as planned but after an extended period of regular disappointments, shareholders can be forgiven for being cynical."

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