Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (43108)	2/27/2006 5:38:44 AM
From: Johnny Canuck	Read Replies (3) \| Respond to of 69126

Vodafone in hefty write-down U.K. mobile group to slash up to $49 billion in goodwill By Steve Goldstein, MarketWatch Last Update: 5:14 AM ET Feb 27, 2006 LONDON (MarketWatch) -- Vodafone Group on Monday said it will slash as much as $49 billion in goodwill due to slowing growth in Germany and other top markets. Vodafone, (VOD : vodafone group plc new sponsored adr News , chart, profile, more Last: 20.51+0.01+0.05% 4:00am 02/27/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: Ameritrade. Get a Treo? smartphone. VOD20.51, +0.01, +0.0%) in a review of its accounting due to the adoption of international accounting rules, said it now expects to write down 23 billion pounds to 28 billion pounds ($49 billion) of assets, mostly on the goodwill it took on from its 110 billion-pound acquisition of Germany's Mannesmann in 2000. Goodwill is the value of a company beyond its assets -- such as brand names or employee morale -- that should translate into better earnings growth. With profit warnings in the past half year not only from Vodafone but telecom peers Deutsche Telekom (DT : deutsche telekom ag sponsored adr News , chart, profile, more Last: 15.89-0.02-0.13% 4:01am 02/27/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: DT15.89, -0.02, -0.1%) and France Telecom (FTE : france telecom sponsored adr News , chart, profile, more Last: 22.18-0.06-0.27% 4:03pm 02/24/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: FTE22.18, -0.06, -0.3%) , the company's management said it needs to factor an increasingly competitive market into its accounting model. Vodafone's London-listed shares (UK:VOD: news, chart, profile) dropped 3%. Shares heading into Monday's announcement were already down 25% from a 52-week high, and analysts said the impairment news was already partly captured in the share price. A combative Arun Sarin, the company's chief executive, said he's still comfortable in his position. "I have the support of the board, and they're comfortable with what I am doing," he said on a conference call. The Vodafone news weighed on the wider sector. Telecom Italia (TI : telecom italia s p a new spon adr ord News , chart, profile, more Last: 27.26-0.13-0.47% 12:06am 02/27/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: TI27.26, -0.13, -0.5%) declined 1% in Milan and Deutsche Telekom declined 0.8% in Frankfurt, though France Telecom reversed early losses to trade 0.2% higher in Paris. Lowering outlook in following fiscal year Vodafone also issued a profit warning for the fiscal year ending March 31, 2007, though it's excluding the impact of recent deals in Turkey, South Africa, India and Sweden. While adjusted earnings per share are expected in line with market estimates, Vodafone said that comparable-sales growth -- or organic proportionate mobile-revenue growth, in its words -- will grow at a 5% to 6.5% clip. Vodafone has been eyeing 6% to 9% in comparable revenue growth in the year ending March 31, 2006 and "slightly lower" revenue the following year. It also said that operating margins outside of Japan should shrink around 1% on a comparable basis because of pricing pressures, additional investments in customers and forced changes in termination rates. Termination rates are the fees mobile operators charge other carriers to use their networks. Sarin said there would be no "material impact" from the write-down on the dividend or buybacks. But he cautioned that the board in May will meet to discuss its cash-return policy. He added that there are "no current plans" to sell its stake in Verizon Wireless, the mobile arm in the U.S. that's majority held by Verizon Communications (VZ : verizon communications com News , chart, profile, more Last: 33.81-0.11-0.32% 4:15am 02/27/2006 Add to portfolio Analyst Create alertInsider Discuss Financials Sponsored by: VZ33.81, -0.11, -0.3%) .