STOCKS NEWS EUROPE-Vodafone falls; margin pressure seen

Shares in Vodafone (VOD.L) shed 2.3 percent, topping the FTSE 100 .FTSE losers' list, after the mobile telecommunications firm reports in-line first-half results and an extention to its cost-cutting programme, with analysts citing likely margin pressure from its operations.

Vodafone says it will extend its cost cutting by a further 1 billion by 2012, after the programme helped boost cash flow in the first half.

"Despite this, margins (are) expected to deteriorate by 210 basis points compared to 180 basis points before. This reflects Indian pressures plus a likely increase in Vodafone's commercial activity in Europe," analysts at Cazenove write in a note.

Keith Bowman, analyst at Hargreaves Lansdown, says pressure on the group's customer base remains evident and warns on the cost-cutting programme.

"Whilst the results have broadly met analysts' expectations, a continued dependency on cost cutting measures fails to truly inspire," he says.

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