French telecom-to-entertainment group Vivendi SA (VIV.FR) Wednesday confirmed its full-year guidance as strong second-quarter growth at its video games and Brazilian telecoms units continued to offset weakness in the company's French telecoms business.

"Despite the turbulent economic and financial environment, our operational indicators are increasing. We confirm our full year outlook for adjusted net income above EUR3 billion, and for an increase in the dividend," Chief Executive Jean-Bernard Levy said in a statement.

The CEO urged caution for the rest of the year amid heightened concerns over the global economy but said that so far he has seen no signs of a slowdown in business.

During the 2009 financial crisis, Vivendi's subscription-based model and exposure to fast-growing digital markets left it somewhat resilient to big drops in sales.

Still, the company will not decide on the level of its dividend increase until the end of the year, Levy added.

Net profit rose 23% to EUR824 million in the second quarter, driven by the settlement of a legal dispute in Poland as well as a tax advantage linked to Vivendi acquiring full control of telecoms group SFR, while revenue rose 0.2% to EUR7.07 billion, in line with analysts' forecasts.

Adjusted earnings before interest and taxes, which excludes non-recurring items, rose 0.3% to EUR1.66 billion, beating analysts' forecasts, as a surge in profit at video-games maker Activision Blizzard Inc. (ATVI) and Brazilian telecoms unit GVT offset weakness at SFR and Maroc Telecom (IAM.CL), in which Vivendi owns a majority stake.

AT 0838 GMT Vivendi shares rose 4.6% to EUR16.92, the second-highest gainer on a higher CAC-40.

Vivendi earlier this year acquired full control of SFR, simplifying the group's structure and giving it access to more cash. However, SFR is struggling amid heightened competition in the French telecoms market ahead of the launch of Iliad SA's (ILD.FR) Free brand. SFR's adjusted EBIT dropped 8% in the second quarter.

Vivendi continues to look for small to medium-sized acquisitions to boost its presence in emerging markets, said Levy but he declined to comment on suggestions the group may be interested in acquiring all or part of Polish broadcaster TVN SA (TVN.WA). "We never comment on any particular rumor," Levy said, but added the company is "very attentive" to what is happening in Poland where it already has operations.

The CEO also said there has been no contact with Lagardere SCA (MMB.FR) over the past few quarters regarding its stake in French pay TV company Canal Plus France and talks are not on the agenda. Vivendi has previously expressed interest in buying the 20% it doesn't already own in the company but Lagardere was planning to launch an initial public offering for the stake, before it postponed the plans in the spring amid worsening market conditions.

-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54; ruth.bender@dowjones.com

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