US lawsuit drags down Vivendi profit outlook
Vivendi, Europe's largest entertainment group, sounded a cautious note on its profit outlook for this year despite posting better than expected results for 2009, boosted by its video games and telecom units.
Chief Executive Jean-Bernard Levy said he expected "slight growth" on an adjusted operating profit basis this year, a change from the "strong growth" the group achieved last year.
"We are being reasonably conservative on our predictions for 2010," said Levy on a conference call. "There is still a lot of uncertainty on the economy and consumer demand remains a question mark in some countries."
The owner of Universal Music Group, the world's biggest record company, also said net profit for 2009 was dragged down by a €550 million (Dh2.74 billion) provision for possible damages in a US class-action lawsuit. Uncertainty about the case and its cost, have weighed on the shares since a January court decision.
"Expectations were low going into results and we, therefore, expect some bounce in the shares. All divisions look broadly in line to be better," UBS analyst Polo Tang said. Vivendi posted revenue up 6.9 per cent last year at €27.13bn while earnings, before interest, tax and amortisation increased 8.8 per cent.
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