VIVEF Vivendi (PK)

By Patrick Costello

Vivendi SA (VIV.FR) shares rose Friday after the company reported a jump in revenue and pretax earnings in its 2018 results late Thursday.

Revenue at Vivendi rose 11% on year in 2018 to 13.93 billion euros ($15.71 billion), while its profitable Universal Music Group subsidiary grew revenue 10% to EUR6.02 billion.

Earnings before interest and taxes increased to EUR1.18 billion from EUR1.04 billion, Vivendi said.

At 0936 GMT, Vivendi shares were up 6.8% at EUR24.27. The share is up 14% on year.

Analysts said that revenue growth at UMG was the highlight of Vivendi's earnings, particularly in light of Vivendi's plans to sell up to 50% of its stake in UMG.

While Vivendi's overall results were in line with forecasts, UMG's revenue growth exceeded expectations and will likely "fuel enthusiasm" around the sale of the music subsidiary, analysts at Citi wrote.

Vivendi didn't deliver a concrete update on the sale, but "the market is excited about the potential for this division," Citi noted. "Even without concrete progress on the sale process, this alone will be enough to keep investors upbeat."

Equally as reassuring for investors is Vivendi's announcement to seek up to a 25% share buyback worth up to EUR8 billion, analysts at Deutsche Bank said, noting this move is unrelated to the UMG stake sale.

"Shareholders have been concerned that Vivendi's net cash and UMG proceeds would be squandered on overpriced and questionable deals," Deutsche Bank said. "This offers strong rebuttal."

Write to Patrick Costello at patrick.costello@dowjones.com.

(END) Dow Jones Newswires

February 15, 2019 05:09 ET (10:09 GMT)

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