FRENCH media company Vivendi SA said yesterday that net income fell 3.5 percent in the second quarter due to fewer music releases from artists like Eminem and Lady Gaga, but it raised its full-year outlook as it expects strong results from video games and mobile services in emerging markets.

Vivendi executives said the Paris-based company was on track to post better results for the full year than in 2009 due to growth at Brazilian telecoms unit GVT and video games maker Activision Blizzard, the producer of "World of Warcraft."

The company behind Universal Music, Canal Plus television, and mobile phone division SFR said net profit dropped to 1.06 billion euros (US$1.34 billion) in the second quarter from 1.1 billion euros. Revenue rose 6.2 percent to 7.06 billion euros.

Underlying profit, which excludes most non-recurring and non-operating items and is the measure watched closely by financial analysts, fell 3.4 percent to 790 million euros.

For the first six months of the year, Vivendi reported a 4 percent increase in adjusted net income to 1.53 billion euros? a figure that outpaced analysts' estimates polled by Thomson Reuters? and said earnings before interest, taxes and amortization rose 11.9 percent to 3.24 billion euros.

Philippe Capron, the chief financial officer, told analysts on a conference call that the first-half results this year were "a bit dampened" but that Vivendi had already guided financial markets about the situation. The dividend of 1.40 euros per share will be maintained.

Vivendi said fewer international releases and lower demand drove down Universal Music Group's revenues by 5.4 percent to 1.9 billion euros.