Dinos spike Viv U
Stock gets a jolt from 'Jurassic,' earnings
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Revenue in media and communications (Vivendi still owns a big water and waste management business) rose 14% in the second quarter to 6.6 billion euros ($5.7 billion).
Ebitda, a measure of cash flow, jumped 53% to $1.2 billion as the company, which has faded a bit from the radar screen of many U.S. investors since U parent Seagram and Vivendi merged last year, asserted its muscle as the world's second largest entertainment conglom after AOL Time Warner.
As topper Jean Marie Messier pointed out, Vivendi U is less dependent than some peers on the current weak advertising market.
That helped its shares rise 5% to $55 in a down market soured by a stream of disappointing earnings. AOL Time Warner, the first big media conglom to report results, posted lower than anticipated revenue last week.
Telecom alive and well
Vivendi Universal's telecom unit posted strong numbers. Film did, too, as U continues a solid run. Upbeat box office for the big-ticket "Jurassic Park III" removed "the last (element) of uncertainty in the 2001 release schedule" in terms of cost vs. return, Messier said. Upcoming releases, like "American Pie 2" in August, are less pricey and still likely to perform.
He said U's lengthening string of successes will continue to boost revenue as they trickle onto video and DVD this year and next.
Universal Studios, which includes a giant theme park biz, saw cash flow soar to $147 million from $50 million, spurred by "The Mummy Returns" and "The Fast and the Furious." Revenue rose 4%.
Cash flow at giant pay TV operator Canal Plus rose 26% to $121 million. Revenue rose 11%.
Total TV and film cash flow rose 84% to $273 million. Revenue rose 8% to $1.95 billion.
As the worldwide music industry slowed in the quarter, Universal Music's cash flow still rose 17% to $235 million, due in part to higher sales of catalog product, music publishing and a slight decline in A&R costs.
Music rev flat
Revenue for the world's biggest music group was close to flat at about $1.34 billion. Overall, U.S. markets have declined since the start of the year, along with big overseas markets like Brazil and Germany.
Major releases included discs from Blink-182, D12 and Shaggy, the "Moulin Rouge" soundtrack and Bon Jovi's live album.
Telecom revenue, including Cegetel and mobile phone division SFR, rose 51% to $1.72 billion, and cash flow was up 70% to $611 million, helped in part by the acquisition of 35% of Morocco's state telephone monopoly, Maroc Telecom. Analysts also noted improved margins, lower customer acquisition costs and lower churn at SFR.
Telephony is a centerpiece of Vivendi's strategy, as the company seeks to deliver a whole host of content and services via cell phone and other handheld devices. A wireless portal called Viz a Viz was to play a big part in that transformation. Yet Messier Monday scaled back his once rapturous expectations for the service, which was launched with great fanfare last year.
"Perhaps we overstated," he said. Viz a Viz "is only one of the numerous ways to create value within Vivendi Universal." Vice chairman Edgar Brofman Jr. said rolling out Viz a Viz infrastructure into Europe took longer than expected.
Publishing revenue eased 6% to $690 million. Cash flow was flat at $104 million. In June, the company announced plans to buy Boston-based educational publisher Houghton Mifflin for $2.2 billion in cash.
Vivendi said it realized about $175 million in cost savings in the first six months of the year and will deliver a further $300 million in 2002. Messier promised the conglom will meet its 2001 financial targets of 10% revenue and 35% cash flow growth.
