LONDON -- The shares of Vodafone (LSE: VOD.L) (Nasdaq: VOD) slipped 4% to 161 pence in London trade this morning after the telecom group issued mixed interim results and said it would spend a forthcoming dividend from Verizon Wireless on a share buyback.

The FTSE 100 member admitted its first-half performance had been "slightly below" its expectations, with group revenue down 7% to 21.8 billion pounds and adjusted profit up 2% to 6.2 billion pounds.

Vittorio Colao, 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 pound write-off relating to the group's Spanish and Italian operations.

The statement also revealed the forthcoming receipt of a 2.4 billion pound dividend from Verizon Wireless. However, Vodafone added that it would use 1.5 billion pounds from the proceeds on a share buyback program.

The decision to spend the upcoming Verizon payment on buybacks contrasts a previous decision to distribute an earlier windfall. When Vodafone received a 2.9 billion pound payout from its 45% stake in the U.S. mobile operator during January, some 2 billion pounds was distributed to ordinary shareholders through a special dividend.

Today's Vodafone results indicated that full-year profit would be a bit higher than expected at close to 11.9 billion pounds, while free cash flow would be a bit lower than expected at about 5.3 billion pounds.

The interim dividend was lifted 7.2% to 3.27 pence per share, and Vodafone confirmed its target of lifting the current-year payout by at least 7%. That should mean that the full-year dividend will be 10.2 pence per share, which would support a potential 6.3% yield for today's buyers.

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