By Sudip Kar-Gupta
PARIS (Reuters) - Vivendi (PA:VIV) shares dropped on Friday as the French media conglomerate disappointed investors by failing to offer full guidance for 2018.
Shares in Vivendi, led by French billionaire Vincent Bollore (PA:BOLL), were down 5.6 percent at 20.95 euros (18.60 pounds) in early trade, the worst performer on France's benchmark CAC-40 index (FCHI). The shares had outperformed the stock market in 2017
Vivendi has generally benefited from the music industry's shift towards paid streaming services and subscriptions revenue, and has acquired stakes in firms such as Telecom Italia (MI:TLIT) and video games company Ubisoft (PA:UBIP).
The company reported late on Thursday a rise in profits, as growth at its UMG music division helped offset a downturn in its recently-acquired advertising unit Havas.
"Management voiced 'cautious optimism' on UMG's 2018 outlook. However, they were unwilling to be drawn on guidance for UMG or the prospects for margin expansion, citing low predictability," Jefferies analysts wrote in a note, keeping a "hold" rating on Vivendi shares.
Analysts at Barclays (LON:BARC) also highlighted the "poor performance" at Havas. Barclays kept a "neutral" rating on Vivendi shares and trimmed its price target on the stock.
The strong performance by UMG has fuelled speculation about a stock flotation and contributed to the rise in Vivendi's shares last year, but Chief Executive Arnaud de Puyfontaine said there were no current plans for any market listing for UMG.
Analysts at UBS said factors such as the lack of a flotation plan for UMG showed it could be hard to unlock further value in Vivendi shares in the near term.
"Vivendi's decision not to set group guidance, although understandable, also adds an additional layer of uncertainty," UBS wrote, although it kept a "buy" rating on the stock.
Vivendi shares, which climbed 24 percent in 2017 to beat a 2.6 percent drop in the STOXX Europe Media 600 index (SXMP), are down by about 6 percent so far in 2018.