Longtime Conservative Portfolio holding Vodafone (NSDQ: VOD), stock price popped more than 4% since late May.  The European global telecom company increased its earnings forecasts for the next three years while beating analysts’ earnings expectation for its fourth quarter.  

Vodafone’s earnings per share for its fourth quarter of 2016 were 75 cents, beating Wall Street consensus estimates of 67 cents.  The telecom reported revenue of $61.97 billion for the quarter, surpassing the $58.90 billion that analysts estimated. The company is expecting organic earnings before interest, tax, depreciation and amortization (EBITDA) growth to be between 3% and 6% for fiscal 2017.

In the earnings call, management said the main reasons for the earnings uplift were customer growth and improved cost management. Also, the firm expects increased returns in the next couple of years from its $9.6 billion investment project called Project Spring, which is increasing demand for telecom services.

Project Spring, announced in September 2013, aims to cover the company’s five biggest European markets with high-speed, fourth-generation (4G) wireless service by 2017. Europe lags Asia and the U.S. in 4G service, which is becoming increasingly coveted by mobile users who want faster access to data and video on smartphones, tablets and other devices.

Meanwhile, along with Europe’s improving economy, Vodafone’s sales have improved. As management pointed out on the call, the firm’s reversal of fortune has been broad-based across Europe, “It’s great to see some of [Europe’s] main markets join the rest of growth markets, with Germany, Italy, Spain and even Greece moving positive,” the company’s CFO said on the call.

“I’m pleased to see stabilization in Europe – first time since December 2010 that we have a 0.5% revenue growth and continuing strong execution,” Vodafone’s CEO said.    

With respect to emerging markets around the world, the story is of new growth. On balance the move to new generation wireless services is increasingly profitable and growing in markets such as Africa, Egypt, India, Turkey and Portugal, to name a few.  

In fact, as the company sees new growth in emerging markets as a result of its Project Spring investment, EBITDA is expected to increase by the mid-to-high single digits from its previous forecast of mid-single digits. Service revenue is projected to increase in the low-to-mid single digits over the next three years, compared to its previous forecast of low single digit growth.   

Vodafone has long been emblematic of our preferred Global Income Edge investment: a multinational operating in a stable developed economy with growth prospects in emerging markets, with the size and scale to offer diversification and income stability.

And with improvements in its business in Europe, Vodafone’s results are yet more evidence that the region is one the mend.

With a dividend of 4.87%, VOD is an enthusiastic Buy up to $39.