Vivendi Q4 loss narrows
Says 2010 kicked off with a 'solid' startFrench media powerhouse Vivendi posted a narrowed fourth-quarter loss on Monday and said it has kicked off 2010 with a "solid" start.
But citing a still uncertain future for the economy and consumer spending, management predicted only "slight" growth in adjusted operating profit for the current year.
Vivendi reported a quarterly loss of €958 million ($1.3 billion), including a €550 million ($744.6 million) provision for a long-running U.S. shareholder class-action lawsuit, compared with a year-ago loss of €1.38 billion.
Revenue for the fourth quarter declined minimally to €7.61 billion ($10.3 billion) since most of Vivendi's revenue is subscription-based.
For the full year 2009, revenue was up 6.9% to €27.1 billion ($36.69 billion), slightly above expectations. Profit fell 68% to €830 million ($1.12 billion). But earnings from operations rose 8.8% for the year to €5.4 billion ($7.31 billion).
Vivendi owed its less-than-expected decline in full-year revenue in part to the continued success of its Activision Blizzard games unit. The games unit, whose titles include "Guitar Hero" and "World of Warcraft," saw revenue leap to €3 billion ($4.1 billion) in 2009, accounting for 11% of total sales. Activision Blizzard's video game blockbuster "Call of Duty: Modern Warfare 2," released last year, has seen phenomenal success with the global bestselling title already raking in more than $1 billion since its launch.
Vivendi unit Universal Music Group, however, saw revenue drop 1.2% in the latest quarter and 6.2% to €4.36 billion ($5.91 billion) in 2009 despite bestselling releases by the likes of Lady Gaga and growing digital sales. Operating profit rose 18.7% in the quarter, but fell 14.7% for the year assuming constant currency rates.
Vivendi's France-based operations appear to have survived the financial storm with pay TV group Canal Plus seeing its operating profit grow 16.7% for 2009 on a constant currency basis despite an only 1.6% revenue gain to €4.5 billion ($6.09 billion). In the fourth quarter, revenue rose slightly, but operating profit declined.
Vivendi has been embroiled in an ongoing U.S.-based class action lawsuit brought by shareholders that included the provision in the last quarter of 2009, not including upcoming charges the group will have to pay as the saga continues.
In a press conference on Monday, Jean-Bernard Levy said the company continues to work on repealing a recent ruling against it in the case, emphasizing once again that it was "curious" that a recent verdict found the company guilty of financial misrepresentation years ago, but not the then-management led by Jean-Marie Messier.
Also in the last quarter, Vivendi agreed to sell its stake in NBC Universal and bought Brazilian telecom GVT. "We think we got a good deal," Levy said about the NBC Uni agreement.
The group is hopeful for a positive 2010 and predicted further operating profit growth in 2010.
Rebecca Leffler reported from Paris. Georg Szalai reported from New York.