The results were boosted by growth in India and Turkey and solid performances in Germany, Britain and the Netherlands.
Vodafone raised its interim dividend by 7 percent on top of a special dividend from US venture Verizon Wireless .
“They’re really great numbers,” analyst Will Draper at Espirito Santo said.
“Revenues are up 1 percent on the consensus and they’ve raised the operating guidance toward the top end of the range. So I think they’re pretty bullet proof.”
Vodafone moved its outlook for full-year adjusted operating profit to the top end of its range, predicting profits of between 11.4 billion and 11.8 billion pounds, compared with an earlier forecast of 11 to 11.8 billion pounds.
But the group showed it was still facing tough conditions in southern Europe. Its core profit margin slipped 0.6 percent points due to price cuts in Spain, although at 32.0 percent it was still ahead of a 31.6 percent Reuters poll forecast.
In Italy, a decline in organic service revenue accelerated to 3 percent in the second quarter from 1.5 percent in the first, and Vodafone took an impairment loss of 450 million pounds ($720 million) in relation to its Greek business.
“Although we remain mindful of the uncertain economic outlook, we are confident that we have the right strategy and capabilities to continue to perform consistently through top line growth, cost efficiency, investment and cash generation,” Chief Executive Vittorio Colao said.
The group posted first-half revenue up 4.1 percent to 23.5 billion pounds and core earnings up 2.3 percent to 7.5 billion pounds. Analysts had been expecting group revenue at 23.4 billion pounds and earnings at 7.4 billion pounds.
On the key industry metric of group organic service revenue, which relates to the provision of ongoing services, the group was up 1.3 percent in the second quarter, better than consensus of 1.1 percent.
“Within that, the really encouraging thing was Europe which was only down 1.3 percent, compared to the forecast of minus 1.7,” said Espirito Santo’s Draper.
European organic service revenue was down 1.3 percent, flat on the first quarter and ahead of forecasts.
The group reiterated its outlook for free cash flow of 6 billion to 6.5 billion pounds, despite missing forecasts due to what it described as a timing issue.
