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Vodafone and M&S disappointments drag FTSE lower

Vodafone and M&S disappointments drag FTSE lower

Vodafone (VOD) and Marks & Spencer (MKS) have dragged the FTSE lower after both companies unveiled disappointing results.

Vodafone shed 9.2p, or 4.2%, as it unveiled full-year earnings below investors expectations at £12.8 billion, 7.4% down on the previous year. Marks & Spencer meanwhile dropped 14.8p, or 3.3%, to 436.2p as the retailer reported a third year of falling earnings. The FTSE 100 slipped 33 points, or 0.5%, to 6,811.

Analysts at Jeffries said Vodafone's results contained 'little to inspire confidence in turnaround prospects', adding there was scant evidence of any improvement in revenues. They added that investment in Germany and the UK was weighing on margins and that in Germany in particular, results had been modest given the scale of the investment.

'Our operational performance has been mixed,' said Vodafone chief executive Vittorio Colao. 'In Europe, where we continue to face competitive, regulatory and macroeconomic pressures, we have taken steps to improve our commercial performance, particularly in Germany and Italy, and are beginning to see encouraging early signs.'

Declining revenues at Marks & Spencer, which made a pre-tax profit of £623 million in the year to 29 March, meant it fell behind fast growing rival Next (NXT) for the first time.

Having now launched a troubled new website, capital expenditure levels are set to fall, but investors are worried online difficulties could persist and are waiting to see if an improvement in performance follows. 'We need to see a sutained pick up in clothing performance and signs of market share recovery to take a more positive view on M&S,' said Peel Hunt analyst John Stevenson.

AstraZeneca (AZN) continued falling after yesterday's plunge following the pharmaceuctial giant's rejection of a 'final' takeover approach from US rival Pfizer. It fell a further 53p, or 1.2%, to £42.38 as investors appeared to accept any lingering hopes of the deal being revived were now dead.

Carnival (CCL) was the biggest riser on the FTSE 100, adding 112p, or 4.9%, to £24.14 as the cruise company announced plans to expand its Australian operations.

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