Analyst Note
| Michael Hodel, CFA |The recovery in Vodafone’s business continued into its fiscal third quarter, at least on the revenue line (the firm only discloses sales metrics for odd-numbered quarters). Services revenue increased 0.4% year over year excluding currency movements, returning to growth after two quarters of declines. The German business, Vodafone’s most important at more than 30% of revenue, was again a bright spot, with revenue up 1% year over year on solid customer gains. The Spanish business (10% of revenue) also showed strong progress during the quarter, with revenue down only modestly (1.1% year over year) thanks to price increases taken during the quarter. We don’t expect to materially change our GBX 194 fair value estimate or narrow moat rating. Even with the stock responding positively to earnings, we still believe it is attractive.