Vodafone swings to loss, warns trade and currency ‘uncertainties’ could impact earnings

UBS shares were down 2.57% at 9:20 a.m. London time, following a Bloomberg News report saying the Swiss government is expected to require the banking giant to hold as much as an additional $25 billion in further loss-absorption capital. UBS will be mandated to increase its ability to cover 100% of capital at its foreign units at the forthcoming proposal that is expected to be revealed in early June, Bloomberg reported, citing sources familiar with the matter.

Switzerland’s Federal Department of Finance declined to comment on the report. UBS and the Swiss Financial Market Supervisory Authority did not immediately respond to CNBC requests for comment.

UBS has been contending with the possibility of additional capital requirements since it absorbed collapsed Swiss rival Credit Suisse in 2023, arguing that further restrictions will affect its performance and competitiveness.

The Swiss government has expressed concerns that instability or an outright default at UBS — whose balance sheet is nearly double the country’s gross domestic product — could destabilize Switzerland’s financial system.

— Ruxandra Iordache

It’s 19 minutes after the opening bell, and the pan-European Stoxx 600 is trading up 0.2%.

Sectors are in mixed territory, with regional utilities stocks leading gains. London’s FTSE 100 is currently 0.2% higher, while the French CAC 40 has gained 0.1% and the DAX is little changed.

— Chloe Taylor

Telecom giant Vodafone reported a full-year operating loss of 411 million euros ($462.7 million) on Tuesday, citing impairment charges for Germany and Romania that came to 4.5 billion euros.

The previous year, the company posted a full-year operating profit of 3.7 billion euros.

The 2025 loss came as the company reported a 2% jump in full-year revenue, with total revenue coming in at 37.4 billion euros.

Analysts had been expecting total revenues of 38.1 billion euros, according to LSEG data.

Shares of Vodafone were 0.3% higher at 8:22 a.m. in London, paring losses seen immediately after the opening bell.

Looking ahead to 2026, Vodafone noted that its financial performance could be affected by “significant uncertainties” in the current macroeconomic climate, particularly relating to trade and foreign exchange rates.

The company expects adjusted EBITDAaL (earnings before interest, taxes, depreciation and amortization and after lease expenses) to fall in the range of 11 billion euros to 13 billion euros. In full-year 2025, Vodafone’s adjusted EBITDAaL came in at 11 billion euros, in line with its guidance.

— Chloe Taylor

British bakery chain Greggs reported a 7.4% year-on-year jump in sales for the 20 weeks to May 17, with total sales for the period coming in at £784 million ($1.05 billion).

Like-for-like sales in company-managed stores were up by 2.9%, the firm added in its Tuesday trading update.

Greggs cited “product innovation” as a driver of the sales growth, noting that its over-ice drinks range and hot food options were performing well.

Over the reporting period, Greggs said it had opened a net 20 stores, bringing the total number up to 2,638. It said it expected net openings for the full year to be between 140 and 150 shops.

In a note to clients on Tuesday morning, Investec analyst Kate Calvert gave Greggs a “buy” rating and a target price of 2,670 pence. The stock closed at 1,999 pence on Monday.

“The shares trade on a forward PE of 14.5x, close to the bottom of its last 10 years’ PE forward valuation range, which does not reflect its growth opportunity or improving cash generation,” she said.

— Chloe Taylor

Insurer Swiss Life said in a trading update on Tuesday that its fee income rose 3% year on year in the first quarter of 2025, reaching 659 million Swiss francs ($791 million).

Its premiums also rose by 6% from the previous year to 7.9 billion Swiss francs.

The company said its rising fee income was mainly due to strong performance across its own and third-party products and services, as well as the strength of its Swiss Life Asset Managers division.

— Chloe Taylor

The British pound was 0.2% higher against the U.S. dollar at 6:29 a.m. in London on Tuesday, extending its gains from the previous day to trade at around $1.338.

On Monday, sterling rose 0.6% against the greenback after the U.K. and the EU reached a landmark agreement to reset their post-Brexit relations.

— Chloe Taylor

British telecom giant Vodafone Group is expected to report its 2025 financial year results.

Analysts polled by FactSet expect full-year total sales to be £31.74 billion ($42.39 billion), with a pre-tax profit of £1.84 billion. Earnings per share is expected at 7.10 pence.

UBS analysts expect the merger with U.K. competitor Three will add £470 million to adjusted profits, but will detract from free cash flow as the company will be forced to invest upfront.

“While easing declines in German service revenues should be a tailwind for the shares, the prospect of further [free cash flow] downgrades will likely weigh on the stock near-term,” UBS analyst Polo Tang added in an earnings preview note to clients on May 12.

The stock currently trades at nearly 5.3% expected dividend yield. Analysts forecast a dividend of 3.78 pence per share, according to FactSet.

U.K. baker Greggs and Swiss Life are also set to report earnings on Tuesday.

— Ganesh Rao

Here are Tuesday’s opening calls.

European bourses are expected to open higher Tuesday, with London’s FTSE expected to open up 43 points at 8,726, Germany’s DAX up 92 points at 23,998, the French CAC 40 up 41 points at 7,908 and Italy’s FTSE MIB up 92 points at 40,330, according to data from IG.

— Holly Ellyatt