Vivendi 2Q Profit Falls 49 Percent

PARIS (AP) -- Entertainment and telecom conglomerate Vivendi SA reported Friday that its second-quarter earnings dropped 49 percent from a year earlier, when it had a gain from an asset sale, and said it is sticking to its forecast for the full year.

Net profit at the French company fell to 594 million euros ($810 million) from 1.15 billion euros a year earlier. Last year's figure was inflated by the gains on the sale of Vivendi's shares in chemicals company DuPont Co. for nearly $700 million (512 million euros).

"We expect to exceed the record year we had in 2006 and we confirm our outlook for an adjusted net income of above 2.7 billion," euros ($3.7 billion) Chairman Jean-Bernard Levy said in a statement.

Vivendi calculates its net profit by excluding charges such as impairment of goodwill and income from discontinued operations. In the second quarter, adjusted net income rose to 755 million euros ($1.02 billion) from 750 million euros, still below analyst expectations.

Paris-based Vivendi is the owner of Universal Music Group, the world's biggest music company, Canal Plus television, Vivendi Games and telecom operators SFR and Maroc Telecom.

Second-quarter sales rose 7.4 percent, Vivendi said July 25.

Universal Music Group, which hosts artists ranging from Diana Ross to Nine Inch Nails, saw a 3.8 percent rise in second-quarter sales. Canal Plus sales gained 16.3 percent in the quarter.

Sales for Vivendi Games were up 37.8 percent, helped by the popularity of the online role playing game "World of Warcraft." Maroc Telecom gained 23 percent and SFR sales were 3.4 percent higher from a year earlier.

"Vivendi has produced another quarter of solid earnings," said Bear Stearns analyst Nicholas Bell in a research note. The company's full-year guidance "is still conservative and below consensus estimates."

Shares in Vivendi fell 1.74 percent to 30.01 euros ($40.95) Friday in Paris.