Vivendi Third-Quarter Results Exceed Expectations
NEW YORK - Vivendi on Wednesday reported better-than-expected third-quarter financials when excluding the effect of tax reforms driven by strength at video game arm Activision Blizzard.
The results also included the second consecutive quarter of slight organic revenue growth at Universal Music Group - 0.7 percent assuming constant currencies following 0.6 percent in the second quarter.
UBS analyst Polo Tang said in a first reaction that this could be "suggesting the market may be reaching an inflection point after a decade of decline" in the music business.
Vivendi, led by CEO Jean-Bernard Levy, reported a third-quarter profit excluding one-time items of 685 million euros ($923 million), nearly unchanged from the year-ago period. The figure exceeded estimates.
Net profit of 241 million euros declined 35 percent. Earnings before interest, taxes and amortization, a key profit metric of 1.5 billion euros, up 5.3 percent and also exceeding analyst expectations. Activision results, which were reported last week, and a one-off benefit at telecom firm SFR drove the upside surprise. Quarterly revenue declined 1.6 percent to 6.78 billion euros.
However, Vivendi lowered its full-year bottom line guidance due to the impact of previously announced tax reforms, which it estimated to be a 350 million euros drag. Guidance for adjusted profit moved from 3 billion euros-plus to "above" 2.85 billion euros.
UMG earnings before interest, taxes and amortization posted a 36.3 percent gain to 112 million euros. Canal Plus posted a quarterly revenue improvement, but a decline in the bottom line.