Vivendi Returns to Profitability in 3rd Quarter

French media and telecommunications company Vivendi Universal swung to a profit in the third quarter but warned that its end-of-year performance would not be as strong.

Vivendi reported Tuesday that it earned $157 million for the three months ended Sept. 30, contrasted with a loss of $1.5 billion a year earlier.

The return to profitability was because of strong performances by Vivendi’s pay-TV unit Canal Plus and its Moroccan telecommunication business, the company said.

Overall operating profit for the third quarter was $1.07 billion, down from $1.4 billion a year earlier, largely because of business sell-offs. The figure beat analysts’ estimate of $938 million.

The company said its operating profit rose 43% over the year, excluding the effect of the asset sales.

The figures did not include proceeds from the merger of Vivendi’s entertainment assets with General Electric Co.’s NBC, expected to be concluded next year.

Vivendi Universal Entertainment posted a 1% increase in operating profit to $236 million, in line with revenue, as it awaited its merger with NBC.

Universal Music Group saw quarterly operating profit shrink to $4.8 million, a quarter of last year’s figure, on a 16% fall in sales to $1.34 billion.

Vivendi has been fighting to overcome its massive debts racked up in an acquisitions frenzy led by former boss Jean-Marie Messier. His successor, Jean-Rene Fourtou, has been selling off assets since taking over this year.

Vivendi’s debt stood at $15.3 billion on Sept. 30, down $1.1 billion from three months earlier.

The company warned that the third quarter’s “excellent performance shouldn’t be extrapolated to the fourth quarter of 2003, due to the seasonality of certain businesses.”

Separately, the company said it had successfully negotiated a new $3.2-billion loan.