Vivendi SA said first-quarter profit rose by 29 percent as sales grew in its video-game and Brazilian telecommunications units, beating analysts’ estimates.
Adjusted net income, or profit excluding one-time gains and some costs, rose to 950 million euros ($1.35 billion) from 736 million euros a year earlier, the owner of the world’s largest music and video game companies said today. Profit had been predicted at 793 million euros, the average of nine analyst estimates. Sales gained 3.8 percent to 7.2 billion euros.
Chief Executive Officer Jean-Bernard Levy is focusing Paris-based Vivendi on its core telecommunications business before the entry of a fourth mobile operator, Iliad SA, in the French market next year. Sales at Vivendi’s Brazilian phone company rose 54 percent to 329 million euros, while those at Activision Blizzard, the maker of the “Call for Duty” games franchise, climbed 12 percent to 1.06 billion euros.
“Activision is still a powerful machine,” said Claudio Aspesi, an analyst at Sanford Bernstein in London. “Long term, the narrowing number of big hits is a concern, but for now it’s a strong business.”
The company last month agreed to pay Vodafone Group Plc 7.95 billion euros for full control of SFR, France’s second- largest mobile operator.
While Levy has said taking full control of Vivendi’s French units is a priority for the company, he hasn’t succeeded in agreeing a deal with Lagardere SCA to buy the 20 percent of pay- TV operator Canal Plus France held by the publisher.
CEO Arnaud Lagardere this week reiterated that the company, which publishes Elle and Paris Match, plans to proceed with an initial public offering of the stake.
Vivendi confirmed its full-year outlook and said full-year adjusted net income will exceed 3 billion euros. The company said it will pay an increased dividend after the SFR deal.
Vivendi shares fell 1.6 percent in Paris today before the results were released. The stock has fallen 5.4 percent this year, valuing the company at 23.6 billion euros.
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