Vivendi Earnings Top Estimates Amid Shift to Pay-TV, Music

Vivendi SA, the French conglomerate that has announced more than $30 billion of asset sales to focus on media, reported quarterly profit that beat analysts’ estimates as revenue climbed at its pay-TV business.

Adjusted net income rose 20 percent to 161 million euros ($221 million), helped by lower interest costs, the Paris-based company said today. Sales fell 3.7 percent to 2.72 billion euros. Analysts had predicted adjusted profit of 142.8 million euros on sales of 2.73 billion euros, according to average estimates compiled by Bloomberg.

Vivendi has exited telecommunications businesses to pay back debt and refocus on media, around pay-TV unit Canal Plus, record label Universal Music Group and Brazilian Internet provider GVT. Sales at Canal Plus grew as it added subscribers.

“For the first time we’re unveiling numbers that show the new Vivendi -- Vivendi media,” Chief Financial Officer Herve Philippe said on a conference call. “We’re growing in the first quarter, that makes us reasonably optimistic for the rest of the year.”

Vivendi agreed to sell France’s second-largest phone company SFR last month in a $23 billion deal to billionaire Patrick Drahi, who controls Numericable Group, the country’s largest cable operator. Numericable said this week it’s on schedule to complete the transaction by year-end, after the French antitrust watchdog responds.

Vivendi added 0.2 percent to 18.97 euros at 9:25 a.m. in Paris, giving the company a market value of 25.4 billion euros. The stock is little changed this year.

New Strategy

Vivendi has also divested stakes in video-game maker Activision Blizzard Inc. and this week completed the sale of Moroccan phone company Maroc Telecom.

After the divestments, Vivendi will return 5 billion euros to shareholders by 2015 through dividends and share buybacks. It has 7.1 billion euros of debt, when taking into account the completion of the Maroc Telecom sale.

The company will unveil the details of its new strategy after its annual shareholders’ meeting on June 24. It has also scheduled management changes for that date, with Arnaud de Puyfontaine taking over as chief executive officer from Jean-Francois Dubos. Chairman Jean-Rene Fourtou, who oversaw the company’s revamp, will cede his position to Vivendi shareholder and billionaire businessman Vincent Bollore.

“We have a new strategy, which we’ll detail later this year,” Philippe said today. “Of course we now have room for maneuver for potential acquisitions in content, while keeping a prudent financial policy for such choices.”

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