Vivendi 4Q Revenue +8.5%; Confirms 2007 Outlook
PARIS -(Dow Jones)- French entertainment and telecom company Vivendi, Wednesday said fourth-quarter revenue rose 8.5%, as strong performances in its telecom divisions compensated for weaker numbers from other units.
Revenue for the three months ended Dec. 31 increased to EUR6.01 billion from EUR5.55 billion a year earlier, below an average forecast of EUR6.06 billion from 11 analysts polled by Dow Jones Newswires.
The company confirmed its 2007 guidance for adjusted net profit of around EUR2.8 billion.
"It looks like '07 is in the bag," Landsbanki Kepler analyst Conor O'Shea said. Vivendi's fourth-quarter revenue was "broadly OK," said O'Shea, who has a buy rating on the stock.
"The telecom side is performing stronger," O'Shea said. "It's shouldering up some slightly light numbers on the media side."
Vivendi owns Universal Music Group, the world's biggest music company, and Vivendi Games, as well as holding majority stakes in telecom operators SFR and Maroc Telecom and pay-TV broadcaster Canal Plus.
At SFR - France's second-biggest mobile-phone operator and the division contributing the largest share to Vivendi's revenue - fourth-quarter revenue rose to EUR2.37 billion from EUR2.18 billion.
SFR's numbers were stronger than expected, Kepler's O'Shea said. The operator also added 657,000 net new customers in the fourth quarter compared with 377,000 over the same period a year earlier.
Meanwhile, Maroc Telecom's 28% rise in revenue to EUR637 million was "outstanding growth," O'Shea said. The Moroccan operator had reported 2007 revenue Jan. 21.
However, Universal Music saw revenue slip 3.1% to EUR1.61 billion. The drop in revenue was "unsurprising," O'Shea said, pointing out that Universal is still outperforming rivals in "a really tough market."
Vivendi's games division, which the company is in the process of merging with Activision of Santa Monica, Calif., also saw revenue slide. Fourth-quarter revenue dropped 7.4% to EUR302 million, as strong growth at Blizzard Entertainment, which produces the hugely popular World Of Warcraft online multiplayer franchise, was dragged down by falling revenue at the division's other units.
Landsbanki's O'Shea said he hoped the launch of new titles in 2008 would return the division to growth.
French pay-TV group Canal Plus posted a 23% rise in revenue to EUR1.13 billion, boosted by the acquisition of Television Par Satellite at the start of 2007.
"The story for Canal is more about lifting margins," O'Shea said, adding that he would wait for Vivendi's full earnings Feb. 29 to gauge the pay-TV operator's performance.
Vivendi's share price has dropped about 17% over the past year, underperforming France's benchmark CAC 40 index, as concern over the future of the music industry has offset optimism over growth at Maroc Telecom and the games division.
Vivendi shares closed Wednesday down EUR0.50, or 1.8%, to EUR26.82 against a 1.4% drop in the CAC 40.
For 2007, revenue grew 8% to EUR21.66 billion, Vivendi said. Analysts had forecast 2007 revenue of EUR21.7 billion.
-By Jethro Mullen, Dow Jones Newswires; 33 1 4017 1738; jethro.mullen@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 30th January 2008