Vivendi has a new boss, Jean-Rene Fourtou

The firm reported a 131m euro ($157m; �91m) net profit in the three months to September thanks to improving telecoms, pay TV and entertainment businesses.

Vivendi has been struggling under heavy debts built up in a 1990s buying spree by its former boss Jean-Marie Messier.

Mr Messier stepped down earlier this year, since when the company has been selling assets, including its massive US entertainment business.

Disposals

The company said it earned 3bn euros by selling businesses this year, helping to offset the purchase of mobile phone company Cegetel.

Vivendi's total debts were 12.8bn euros at the end of September, 6bn euros less than the same time last year.

That will fall to about 5bn euros by the end of next year, the company said.

Investors have reacted positively to the strategy, lifting Vivendi's shares by about a quarter this year.

In early trading on Tuesday, the stock was 0.1% higher at 19.45 euros.

Sliding scale

It's not all good news, however.

Earnings were hit by the dollar's slump against the euro, and a decline in music sales.

Vivendi, owner of the world's largest record company, said it aims to lower the price of compact discs to lure buyers, a move that is likely to hurt profit further in coming quarters.

Sales at Universal Music Group - whose artists include Bon Jovi, Enrique Iglesias, Busted and Luciano Pavarotti - dropped 16% in the third quarter from a year earlier, while operating profit tumbled by 75%.

In the third quarter of 2002, Vivendi made a loss of 1.23bn euros, as the costs related to assets sales dented profit.