Vodafone Group PLC said Wednesday it has launched a program to buy back 1 billion pounds ($2 billion) worth of its own shares _ a day after the stock plummeted when the mobile phone company scaled back its full-year sales forecast.
Vodafone said the 14 percent fall in its share price on Tuesday had left the stock "significantly" undervalued.
The company recouped only some of those losses on Wednesday after the announcement of the share buyback, with the stock rising 2.4 percent to 131.40 pence ($2.63).
Vodafone, the world's biggest mobile phone provider by sales, said it will seek shareholder approval for the buyback at its annual general meeting on Tuesday. It will pay up to 105 percent of the shares' average closing price in the five business days before the buyback.
Vodafone said on Tuesday it expects revenue to be at the bottom of its 39.8 billion pound ($79.8 billion) to 40.7 billion pound ($81.6 billion) range, dragging the telecommunications sector lower and casting a shadow over the last set of results under outgoing Chief Executive Arun Sarin.
Vodafone said that revenue rose just 1.7 percent to 9.8 billion pounds ($19.6 billion) in the three months to June 30.
The company said its Spanish operations took a hit from falling customer spending and fierce competition, while voice revenue in Britain were depressed by the darkening economic climate.
Excluding the impact of currency-exchange rates, acquisitions and disposals, revenue actually fell slightly in Europe _ something the company attributed in part to tightening margins on voice communications and reduced roaming charges mandated by the EU.
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