* Q3 sales 6.67 bln eur vs Reuters poll avg 6.68 bln
* Q3 EBITA 1.39 bln eur vs Reuters poll avg 1.27 bln
* SFR adds 40,000 contract customers vs 320,000 France Tel
* CFO says strategy review ongoing
* No fresh comments on asset sales
By Leila Abboud and Gwénaëlle Barzic
PARIS, Nov 13 Vivendi, a conglomerate
whose interests range from entertainment to telecom, raised its
annual profit target by 8 percent, to 2.7 billion euros ($3.43
billion), because of strong video game sales, though weakness
persisted at its key French telecom unit.
The group, which is in the midst of a strategy review and is
working on asset sales, posted revenue for the third quarter in
line with analysts' average estimates, and operating and net
profit ahead of estimates.
French telecoms operator SFR, which brought in nearly 40
percent of Vivendi's operating profit last year, continues to
struggle with the fallout of Iliad launching its
low-cost mobile service in January.
Dubbed "Free Mobile", the newcomer touched off a price war
and swiftly won more than 5 percent of the market.
SFR's third-quarter operating profit sagged nearly 17
percent compared with a year earlier to 537 million euros.
Nevertheless, Vivendi said it now expects SFR to post a
decrease in full-year earnings before interest, tax,
depreciation and amortisation (EBITDA) of close to 12 percent,
against 12 percent to 15 percent predicted previously.
SFR added only 40,000 new mobile customers on long-term
contracts and 24,000 broadband customers in the quarter,
compared with larger rival France Telecom's 320,000 new mobile
Analysts say over time Iliad's arrival to the market will
make established players SFR, France Telecom and
Bouygues Telecom structurally less profitable.
Despite the challenges, Vivendi Chief Financial Officer
Philippe Capron said SFR was making progress adapting to the new
reality in France.
"Commercial results at SFR are back in line in fixed and
mobile and cost reductions are underway and starting to yield
results," said Capron, adding that some 30 percent of the
customer base had been transferred to new lower mobile tariffs.
"We warned in the beginning of 2012 that we would be facing
two difficult years. This still holds true but within the
general context, things are going a bit better than planned,
hence the improvement of our earnings forecast," he said.
Vivendi's third-quarter group revenue was down 3.4 percent
to 6.67 billion euros. Earnings before interest, tax and
amortisation (EBITA) fell 8 percent to 1.39 billion euros, while
adjusted net income stood at 665 million euros ($845 million).
Analysts had on average expected EBITA of 1.27 billion euros
and adjusted net income of 602 million, according to a Reuters
poll based on eight estimates.
Vivendi did not provide any fresh details about its ongoing
strategy review in which it is considering selling assets to
reduce debt and reverse a slump in its shares.
It is seeking bidders for its Brazilian telecom unit GVT and
Maroc Telecom, and earlier shopped around video game
maker Activision Blizzard but found no takers at the
price it wanted.
Capron declined to comment on specific asset sales.
"The strategic review is going ahead at full speed, although
we have not fixed a specific calendar for decisions," he said.
"But rest assured, we are committed to delivering value to
shareholders while keeping our current credit rating."
Vivendi shares closed up 1.28 percent at 14.99 euros on
Tuesday before the results were published.