Vodafone (LSE: VOD) issues mixed interim results.
The shares of Vodafone (LSE: VOD) (NYSE: VOD.US) slipped 6p, or 4%, to 161p in early London trade this morning after the telecoms group issued mixed interim results and said it would spend a forthcoming dividend from Verizon Wireless on a share buyback.
The FTSE 100 (UKX) member admitted its first-half performance had been "slightly below" its expectations, with group revenues down 7% to £21.8 billion and adjusted profits up 2% to £6.2 billion.
Vittorio Calao, Vodafone's chief executive, said:
"We have continued to make progress on our strategic priorities over the last six months, with good growth in data and emerging markets in particular. In the short-term, however, our results reflect tougher market conditions, mainly in Southern Europe."
Today's figures included a £6 billion write-off relating to the group's Spanish and Italian operations.
The statement also revealed the forthcoming receipt of a £2.4 billion dividend from Verizon Wireless. However, Vodafone added that it would use £1.5 billion from the proceeds on a share buyback programme.
The decision to spend the upcoming Verizon payment on buybacks contrasts with a previous decision to distribute an earlier windfall. When Vodafone received a £2.9 billion payout from its 45% stake in the US mobile operator during January, some £2 billion was distributed to ordinary shareholders through a special dividend.
Today's Vodafone results indicated full-year profits would be a bit higher than expected at close to £11.9 billion and free cash flow would be a bit lower than expected at about £5.3 billion.
The interim dividend was lifted 7.2% to 3.27p per share and Vodafone confirmed its target of lifting the current-year payout by at least 7%. That should mean the full-year dividend will be 10.2p per share, which would support a potential 6.3% yield for today's buyers.
Right now, Vodafone is just one of a number of FTSE large-caps that offers a dividend income well ahead of what you can expect to receive from a standard savings account.
If you are seeking other high-dividend possibilities, this special free report reviews the favourite income stocks held by Neil Woodford -- the City fund manager who has thrashed the FTSE 100 during the 5, 10 and 15 years to 2011 by favouring dividend-paying blue chips.
Just click to download these Neil Woodford share ideas today. But do hurry, as this report will remain free for a limited time only.
> Maynard does not own any share mentioned in this article.