Vivendi Profit Beats Consensus (reuters)

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By Astrid Wendlandt Thu May 19, 4:20 AM ET PARIS (Reuters) - Vivendi Universal posted forecast-beating first-quarter operating profit on Thursday, helped by music hits from 50 Cent and Scissor Sisters and a better-than-expected performance by its Canal Plus pay-TV unit.

The French telecoms and media group, which owns the world's biggest music publisher and controls SFR, France's number two mobile operator, generated first-quarter earnings before interest and tax (EBIT) of 877 million euros ($1.13 billion).

Its performance compared with a Reuters consensus of 840 million euros, based on a poll of 13 analysts, and with 694 million euros in the year-ago period under international accounting standards.

Vivendi, which nearly collapsed three years ago, has been cementing its recovery in recent months, having completed a thorough asset disposal and debt restructuring program.

The Paris-based group has sold more than 90 assets since July 2002 and raised 22 billion euros in the process.

The group's net attributable profit of 502 million euros came well above a range of 371-483 million euros based on a Reuters poll.

"The numbers are much better than expected, there's no doubt about it," said a trader at a French brokerage. "Investors now want to know how the company sees coming quarters profiling. This will set the tone for the stock's medium-term performance."

The stock was up 1 percent at 24.97 euro by 0713 GMT.

CANAL PLUS IMPRESSES

Vivendi's Canal Plus pay-TV unit, which has been a source of concern for analysts, performed better than expected on the back of strong sales and lower costs.

Operating profit from the division came to 132 million euros, up 37 percent, well above a Reuters consensus of 73 million euros.

"The results are good, in line with the sales figures the group published, with a nice surprise on Canal Plus," said Pierre Bucaille, analyst at French brokerage Fideuram Wargny.

The Paris-based group's SFR Cegetel telecoms division, however, reported a first-quarter operating profit of 567 million euros, up 2 percent but below a Reuters consensus of 581.4 million euros.

Vivendi said costs related to the launch and promotion of Internet services by the group's fixed-line business Cegetel weighed on profits.

Cegetel incurred an operating loss of 35 million euros, against a loss of 5 million euros in the first quarter last year.

"It looks like investors have underestimated losses from Cegetel," one Paris-based analyst said.

Last week, Cegetel announced it would merge with its closest rival Neuf Telecom to build scale and accelerate its move to profit.

(Additional reporting by Marie Maitre in Paris) RECOMMEND THIS STORY Recommend It: Not at All Somewhat Moderately Highly Very Highly

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