Vivendi Ups Profit Forecast For 2010, Attributing Growth To Activision Blizzard

Paris-based media and telecommunications giant Vivendi SA has today increased its profit expectations for 2010, despite reporting a drop in second-quarter net profit. The company, which owns a 52 percent majority shareholding in video game publisher, Activision Blizzard Inc., said its profits for the second quarter ended June 30 slipped 3.7 percent to 669 million euros ($856.4 million) from 695 million euros ($889.7 million) last year. But Vivendi said it still expects growth in earnings before income and taxes, and a higher adjusted profit than the one recorded in 2009, an increase it specifically puts down to growth in its video game division, aided by Call of Duty: Modern Warfare 2 and other titles at its Activision Blizzard unit. Sales during the quarter were 7.06 billion euros ($9 billion), up 6.2 percent from 6.65 billion euros ($8.85 billion) for the same quarter a year prior. Jean-Bernard Levy, chief executive of Vivendi said: "Our most recent strategic acquisitions, GVT, Activision Blizzard and SFR broadband and fixed, achieved excellent operating performances." The publisher, created in 2008 when Vivendi bought a controlling stake in Activision Inc. and merged it with its Blizzard Entertainment business, grew faster than analysts had expected. Last month, it said it would buy back $1 billion in shares and pay its first dividend. "Activision Blizzard had a much stronger performance than the year before,” Levy said. “The contribution of Activision Blizzard [to Vivendi] has become very significant.” The publisher, whose titles include Guitar Hero, World of Warcraft, and StarCraft II, had revenue of 3 billion euros ($3.8 billion) in 2009, accounting for 11 percent of total Vivendi sales. Activision Blizzard has recently reaffirmed its calendar year 2010 outlook saying that it expects net revenues of $4.4 billion and $0.72 earnings per share. Despite these positive projections, Vivendi remains locked in a U.S. legal battle with investors who say the company lied to them about its performance under former CEO Jean-Marie Messier. In January, a jury ruled investors were misled 57 times between 2000 and 2002. Vivendi is appealing the ruling, which the plantiffs’ law firm has reported could lead to $9.3 billion in damages.