Seagram Co., the media company being bought by Vivendi SA for about $40 billion, said its fiscal fourth-quarter loss was little changed from a year ago even as it sold more records and produced a string of hit movies by its L.A.-based Universal Studios Inc. unit.
Seagram, which also owns a liquor and wine business, said it had a net loss of $128 million (29 cents a share), compared with a loss from operations of $129 million (32 cents) a year ago. Revenue rose 5 percent to $3.7 billion.
Hit records from performers including Eminem and Sting helped drive up sales and cash flow at the company's music unit. Successful movies such as "Gladiator" contributed to cash flow of $5 million at the film division. A year earlier, the studio had negative cash flow of $69 million.
"The music business was solid," said Robert Lyon, president of Institutional Capital Corp. in Chicago. "And in the movie business, people have been hoping for a turnaround. Now you're seeing some evidence."
Institutional Capital owns about 6 million Seagram shares, Lyon said.
The company's loss for the quarter ended June 30 was smaller than the 35-cents-a-share loss forecast in the average estimate of analysts polled by First Call/Thomson Financial.
"The turnaround in film is well under way, and next year should be much improved" as hit films move into the video rental market, said Scott Davis, an analyst at First Union Securities, who rates Seagram stock a "neutral."
Universal Studios' "Gladiator," which was co-produced by DreamWorks SKG, has grossed more than $405 million worldwide. "U-571" has grossed more than $76 million in the U.S. and Canada. "Erin Brockovich," co-produced by Universal and Sony Corp.'s Columbia Pictures, has grossed more than $125 million in the U.S. and Canada.
Vivendi shares in Paris have fallen about 12 percent since the company announced June 20 that it will buy Seagram to create one of the world's largest entertainment companies. Seagram shares also have declined about 12 percent since the announcement.
Seagram Chief Executive Edgar Bronfman Jr. said on a conference call with analysts that Vivendi's proposed offer is expected to receive antitrust approval in Europe and Canada by the end of September.
The transaction cleared U.S. antitrust hurdles when a deadline for the Justice Department to request more information on the acquisition expired two weeks ago, Bronfman said.
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