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Film, telecoms boost Vivendi
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October 30, 2001: 8:12 a.m. ET
Europe's biggest media company posted Q3 profit up 30%, on film and telecoms
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LONDON (CNN) - Vivendi Universal, Europe's biggest media company, said on Tuesday profit rose 30 percent on the back of strong growth in film and telecoms.
Unlike its rivals, like AOL Time Warner, Walt Disney and Viacom, Vivendi generates about 44 percent of its revenue from subscription services, which are more resilient to an economic slowdown than advertising.
Vivendi Universal formally became a world-class media company last December through the three-way merger of water-and-telecom company Vivendi, its pay-TV subsidiary Canal Plus and the media assets of Canada's Seagram.
AOL Time Warner (AOL: down $1.35 to $32.15, Research, Estimates) , the parent of CNN, lowered its 2001 earnings and revenue targets in late September after standing by them steadfastly for months even as the advertising climate deteriorated.
"Having the highest resiliency and lowest sensitivity to a recessionary environment explains our ability to outperform most of our peers," said Vivendi chief executive Jean-Marie Messier.
Earnings before interest, taxes, depreciation and amortization (EBITDA) - a measure of profitability for companies with large debts - in its core media and commutations business rose to  1.48 billion ($1.4 billion) from 1.14 billion in the year ago period. Sales rose 8 percent to 7.3 billion.
Both figures were above consensus estimates for EBITDA of 1.41 billion and sales of 7.24 billion, according to Reuters.
Vivendi, which owns businesses such as Universal Pictures and pay-TV channel Canal Plus, said it was sticking with its goal to boost EBITDA and revenues in its core media and communications activities by 35 percent and 10 percent, respectively this year.
The company also reiterated that it was "very comfortable" with market estimates for EBITDA of 6 billion for next year.
"An early look at the fourth quarter indicates that we are on track to meet our targets," said Messier.
Profit growth was driven by Vivendi's television and films division, which benefited from the success of top films like Jurassic Park III and American Pie II. Canal Plus, the firm's ailing pay-TV unit, saw core earnings push up 25 percent to 121 million.
Telecoms also performed well, with core earnings rising 31 percent on the strength of French mobile phone operator SFR. 
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