Thanks 50 Vivendi is making money

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Vivendi Universal SA Tuesday said it will beat its full-year earnings forecast after second-quarter net profit rose 12 percent, driven by strong performances from its music and telecommunications units.

The French media group said net earnings rose to 758 million euros ($933 million) in April through June from euro678 million in the same period last year.

Vivendi said it now expects to beat its full-year target of 1.8 billion euros ($2.2 billion) in adjusted net profit - stripping out non-recurrent profits and losses as well as selloffs and acquisitions.

Vivendi expects to pay out about half its adjusted net income in dividends, Chief Executive Jean-Bernard Levy said, adding that the company is in "great shape."

The figures highlight the continuing recovery at Vivendi, which came close to financial collapse around three years ago following an aggressive expansion. Since then, executives have implemented a major reorganization, selling activities to cut debt and boost profit.



Levy called 2005 "a year of major investments in the creation and acquisition of content, in networks, and in distribution platforms."

Vivendi shares rose 0.9 percent to 26.28 euros ($32.36) in Paris trading.

Second-quarter operating profit, watched by analysts as an indicator of underlying performance, rose 37 percent to 1.08 billion euros ($1.33 billion) from 792 million euros.

Revenue rose 8.1 percent to 4.62 billion euros ($5.69 billion) from 4.27 billion euros. Vivendi adopted the new International Financial Reporting Standards with its first-quarter report.

The music, telecoms and game divisions contributed to the improvement in profits in the second quarter.

The music arm's operating earnings more than tripled to 106 million euros ($131 million). Vivendi said the business - the world's largest music company with a stable of artists including U2 and 50 Cent - made "significant" market share gains in the first half.

The SFR telecom arm posted a 16 percent rise in operating profit to 738 million euros ($909 million).

"Results look slightly ahead, with a strong performance from SFR and music offset by lower-than-expected profits from Canal Plus and games," said Ciaran McCausland at Lehman Brothers.

The games unit rebounded to a 2 million euro ($2.5 million) profit from a 120 million euro loss a year earlier, thanks to the success of World of Warcraft, which had 4 million players at the end of August.

But Vivendi's Canal Plus pay-television unit halved its operating profit to 66 million euros ($81 million) due to higher commercial and marketing costs.

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