The company said its revenue fell a more modest 7 percent, once the effects of divestments and acquisitions were stripped out, and said the stronger euro was partly to blame.

Over the last year, Vivendi has sold off both its waste, energy and transport utility, now called Veolia Environnement, and its publishing arm.

The sale of Vivendi Universal Publishing — since renamed Editis — to defense and media conglomerate Lagardere is still awaiting regulatory approval.

Telecoms subsidiary SFR-Cegetel posted the strongest sales performance over the year, with revenue rising 8 percent to 1.94 billion ($2.21 billion) in the quarter from euro1.80 billion the previous year.

Record division Universal Music Group, much more sensitive to the weak dollar than the telecoms arm, saw its revenue shrink 16 percent over the year to euro1.12 billion ($1.28 billion) in the third quarter, despite high-profile releases from artists including Sting and Mary J. Blige.

Video games sales also suffered, with Vivendi Universal Games posting a 54 percent decline in revenue to euro77 million ($88 million).

Film and TV division Vivendi Universal Entertainment posted revenues of euro1.31 billion ($1.49 billion) in the third quarter, the company said, up 1 percent on the previous year — or 13 percent with currency fluctuations, acquisitions and sell-offs stripped out.

Vivendi has formally agreed to merge VUE with General Electric's NBC television network to create a new media giant under the banner NBC Universal. Vivendi said Friday it hopes to complete the deal in the first half of 2004.

The new company will include NBC's television network and cable channels as well as the Vivendi-owned Universal movie and TV studios, several U.S. cable channels and theme parks.

Despite the negative impact of the stronger euro, Vivendi said it was maintaining its target of a return to profit for the full-year.

Vivendi is not due to publish an earnings figure for its third-quarter performance until December 2.