HITS Daily Double


Bertelsmann Doesn’t Break Out Divisions, VU Reports Revenue Only (It’s a French Thing), but We’ll Tell You What We Can
For the first quarter of 2004, Bertelsmann today reported operating profit in the form of 111 million euros ($134 million) in earnings before interest and tax (EBIT), a return to black ink from last year’s first-quarter loss of 75 million euros. Net profit was 31 million euros ($37 million), up from a 397-million-euro loss a year ago.

The company attributed the turnaround largely to improvement at BMG, which has been on a major roll lately with the likes of Usher, Outkast, Maroon 5, Alicia Keys, Dido and more American Idol-related records than you can shake a stick at.

While Bertelsmann, being privately held, doesn’t choose to break out earnings by division in its first-quarter reports, CFO Siegfried Luther did say to Reuters, “The biggest part of the improvement comes from BMG, which last year had an extraordinary collapse in earnings” thanks to increases in costs and slow sales during the days leading up to the Iraq war. “BMG more than compensated the previous year’s quarter’s performance,” he said.

For the first half of 2003, BMG reported a loss of 117 million euros. First-quarter 2004 revenue for Berrtelsmann as a whole fell 3.6% to 3.79 billion euros from 3.93 billion euros in Q1 2003.

So much for the Germans—on to the French. Vivendi Universal reported a four-percent drop in first-quarter revenue Wednesday, as sagging performance at its music, games and television units failed to be offset by gains at its telecom units.

VU so far has reported only preliminary, unaudited revenue data for Q1 according to French accounting requirements, like they always do. We don’t understand it, but then there’s so much we don’t understand about the French.

Universal Music Group reported an 11% drop in revenue, to 978 million euros from 1,100 euros in the first quarter a year ago. VU attributed the decline to adverse currency movements, ongoing weakness in the global music market and the tough comparison brought about by not having an explosive hit like 2003’s Q1 debut of 50 Cent, whose album sold 3.7 million units in the quarter.

VU as a whole reported Q1 revenue of 5.97 billion euros ($7.20 billion), compared to 6.23 billion euros a year ago.