CORRECT: Vivendi Net Profit Surges, Keeps 2011 Goal
May 12 2011 - 2:36PM
Dow Jones News
French media-to-telecoms conglomerate Vivendi SA (VIV.FR)
Thursday said first-quarter earnings rose even tough competition
and a recent tax change weighed on telecom operator SFR, and
confirmed its full-year guidance.
The Paris-based group said first quarter net profit surged in
the first three months of the year to EUR1.73 billion form EUR589
million last year, boosted by a EUR1.26 billion settlement from the
end of a legal battle in Poland. The Polish settlement offset a
capital loss linked to the sale of Vivendi's remaining stake in NBC
Universal, which was mainly due to a EUR477 million foreign
exchange loss due to the decline of the U.S. dollar since January
2004, Vivendi said.
Revenue rose 3.8% to EUR7.18 billion in the quarter, above
analysts' forecasts for revenue of EUR7.03 billion, helped by
strong sakes at video-games unit Activision Blizzard Inc. (ATVI)
and Brazilian telecom operator GVT.
Adjusted earnings before interest and taxes, a closely watched
figure that excludes charges relating to acquisitions and mergers,
also rose 7.2% to EUR1.71 billion in the first quarter, as gains at
Activision and GVT offset a drop in profits at SFR as well as
Universal Music Group. The figure also topped analysts'
expectations.
Vivendi last month agreed to buy out Vodafone Group PLC's (VOD)
stake in SFR for EUR7.95 billion, giving the French company full
control of its biggest cash generator. However, SFR faces increased
competition in the French telecoms market, where operators are
preparing for the arrival of fourth mobile operator Iliad SA's
(ILD.FR) Free Mobile next year and had to face an increase in value
added tax at the start of the year.
Despite difficulties at SFR, Vivendi said it still expects
adjusted profit to grow slightly this year, counting on strong
growth at its Brazilian telecoms unit GVT to offset weakness at
SFR.
Vivendi also said that it expects adjusted profit to be higher
than EUR3 billion this year and its dividend to increase after
buying 100% of SFR, a deal which is due to close by the end of the
second quarter.
Vivendi shares Thursday closed at EUR19.11.
-By Ruth Bender, Dow Jones Newswires; +33 1 4017 1754;
ruth.bender@dowjones.com