Vivendi reports decline in Q1 profit

Fueled by weaker results from video game unit

Media and telecom firm Vivendi SA on Wednesday reported a 9.6% decline in first-quarter adjusted profit on weaker results at its video game unit.

Adjusted profit, which excludes one-time items, fell from 771 million euros a year ago quarter to 697 million euros ($1.1 billion), but the figure exceeded expectations. When including one-time items, profit fell 41% to 555 million euros ($858.7 million). Revenue rose 5.2%, or 6.9% at constant currency rates, to 5.3 billion euros ($8.2 billion).

Based on the results, Vivendi reiterated its forecast for full-year 2008 profit gains, compared with 2007 growth of about 8%.

Vivendi's Universal Music Group grew first-quarter revenue 0.6%, or 6.8% assuming constant currencies, to 1 billion euros ($1.6 billion), helped by the acquisition of BMG Music Publishing and Sanctuary and a 33% increase in digital music sales. Music operating profit rose 94.7% to 111 million euros ($171.7 million). Best-sellers in the period came from Jack Johnson, Janet Jackson, and Amy Winehouse, whose 2006 album "Back to Black" sold 2.2 million copies in the latest quarter.

The Vivendi Games unit continued to see gains for "World of Warcraft," which added more than 700,000 players in the first quarter. But the latest period was no match for the year-ago quarter, which included a successful "Warcraft" expansion pack. As a result, gaming revenue fell 24.1% to 221 million euros ($342 million), while operating profit declined 53%.

Vivendi's pay TV arm Canal Plus Group boosted revenue 4.5% to 1.1 billion euros ($1.7 billion) driven by 180,000 subscriptions and operating profit of 16.6%.

Vivendi's share of income from NBC Universal, which is 80% controlled by General Electric, came in at 53 million euros ($82 million), down from 65 million euros because of the decline of the U.S. dollar and weaker business momentum.