Vivendi Profit Beats Estimates on Video-Game Titles Including `StarCraft'
Vivendi SA, owner of the world’s largest video-games company, posted third-quarter profit that surpassed analysts’ estimates, aided by titles such as “StarCraft.” The company confirmed its full-year outlook.
Adjusted net income rose 6.7 percent to 688 million euros ($936.5 million) from 645 million euros in the same period last year, Paris-based Vivendi said in an e-mailed statement. Analysts had predicted profit of 684 million euros, according to the average of eight estimates compiled by Bloomberg.
“We should have an exceptionally strong year-end” in the video-games unit, thanks in part to the new “Call of Duty: Black Ops” title, Chief Financial Officer Philippe Capron said on a conference call.
Vivendi Chief Executive Officer Jean-Bernard Levy’s strategy of investing in games has helped make up for declines in the company’s Universal Music unit. Levy is also looking to take full control of SFR, France’s second-largest mobile operator, by buying Vodafone Group Plc’s 44 percent stake in the unit, while remaining open to emerging-market acquisitions.
Vivendi closed 1.5 percent higher in Paris at 20.50 euros, shrinking the stock’s decline this year to 1.4 percent and giving the company a market value of 25.3 billion euros.
Its Activision Blizzard Inc. unit was the quarter’s biggest growth driver with sales rising 17 percent. SFR, which accounted for more than 45 percent of sales, reported a 1.3 percent revenue increase, while Vivendi’s telecommunications unit in Morocco, Maroc Telecom Group, had a 7.2 percent sales growth.
Vivendi reiterated its target for an increase in earnings before interest, taxes and amortization in the full year and adjusted net income higher than in 2009. Ebita growth is likely to be close to 10 percent, Capron said on the call. Vivendi confirmed plans for a dividend for 2010 of 1.40 euros a share.
In the third quarter, Activision Blizzard, in which Vivendi holds a 59.6 percent stake, tripled profit as game players snapped up the latest update to “StarCraft,” a personal- computer game.
Activision sold more than 1 million copies of “StarCraft II: Wings of Liberty” on the first day. The “Call of Duty” title remained a top 10 seller worldwide in the quarter, the company said, citing industry researchers.
On SFR, Vodafone has said it is reviewing its plans for the stake after unloading assets in China and Japan this year. Taking over 100 percent of SFR would give Vivendi full control of the French mobile operator’s cash generation.
SFR, Universal Music
The unit generated more than half of Vivendi’s earnings before interest, taxes, depreciation and amortization last year. Analysts value Vodafone’s 44 percent stake at as much as 9 billion euros.
Vivendi and Vodafone are not in negotiations on SFR, CFO Capron said on the call. Vivendi has received “no specific signal” from Vodafone that a sale of the stake is imminent, he said.
At Universal Music, nine-month sales declined 1.7 percent. There’s room for “very, very significant” cost cuts at the unit, Capron said. He said the company will try to cut costs without hurting “the muscle and the bone” of the business.
Earlier this year, Vivendi failed to reach a deal to buy Lagardere SCA’s 20 percent stake in Canal Plus France, the largest domestic pay-TV operator, which Levy had also targeted for a takeover. The companies are currently preparing an initial public offering of the stake.
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