Vivendi profit falls 41% on slower games sales

Vivendi is reporting a 41% drop in net Q1 profit, dropping to EUR555m (USD859m) from EUR932m (USD1.44bn) for the same period last year. However, the fall is partly due to a gain of EUR239m (USD369m) in Q1 2007, following the sale of a 10.1% stake in pay-TV operator Canal Plus.

Sales for the quarter rose 5.2% to EUR5.28bn (USD8.17bn) from EUR5.01bn (USD7.75bn). Declining revenues from its games divisions were shored up by better than expected revenues from its telecommunications business.

Games earnings fell 53% to EUR50m (USD77m), with last year’s sales driven up dramatically by the release of the ‘Burning Crusade’ expansion pack for flagship MMORPG ‘World of Warcraft’, although the company says that the game added 2m new subscribers over the same period last year and other games divisions, including Sierra Entertainment, Sierra Online and Vivendi Games Mobile, all posted higher than expected results.

The company says the rest of the year will be spent focussing on the integration of its acquisitions of game producer Activision and French telecoms firm Neuf Cegetel, with an 8.3% forecast of adjusted profit growth posted.

Adjusted profit before charges for the period fell 9.6% from EUR771m (USD1.19bn) to EUR697m (USD1.08bn). Vivendi shares dropped EUR0.04 (USD0.06) to EUR25.20 (USD39) following the report.

Published by Reinout te Brake

Reinout is a games investor and strategic business consultant specializing in the games industry. Reinout established his credentials through his own successful investments, start-ups, consulting and (advisory) board positions that led through time to strong bonds with key stakeholders in this fast paced industry. He is known for his outstanding results in the gaming industry. He has worked with many game studios around the globe and is therefore well known in the international gaming industry. Check out his games podcast;

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