Before market open Tuesday, media group Vivendi Universal (V: chart) delivered a narrower-than-expected quarterly loss and met Wall Street's expectations. Moreover, the company reaffirmed its guidance for fiscal 2003 due to 'very strong' growth in operating income.

The media conglomerate managed to cut its loss to €319 million ($374.95 million), compared with a net loss of €17.01 billion ($19.99 billion) a year ago – when a change in accounting methods occurred. On a pro forma basis, the loss posted in the first quarter of last year was €815 million ($957.95 million), Vivendi said.

For the quarter ended March 31, 2003, the company's operating profit totaled €844 million ($992.04 million), exceeding analysts' predictions of €622 million ($731.10 million). In the year-earlier quarter, operating profit was €781 million ($917.99 million).

Operating profit at its main telecommunications units, Cegetel and Maroc Telecom, rose sharply. Cegetel's operating profit surged 30% to €465 million ($546.56 million) from €359 million ($421.97 million), while Maroc Telecom had an operating profit of €138 million ($162.21 million), up 27% from €109 million ($128.12 million) in the same quarter last year.

TV unit Canal Plus Group swung to an operating profit of €158 million ($185.71 million) from a loss of €68 million ($79.93 million) in the prior-year quarter. Operating profit at Vivendi Universal Entertainment rose 44% to €213 million ($250.36 million) from €148 million ($173.96 million).

However, the performance of Universal Music Group (UMG) and Vivendi Universal Games worsened in the quarter. UMG swung to a loss of €28 million ($32.91 million) versus a profit of €27 million ($31.74 million) in the comparable quarter. Meanwhile, Vivendi Universal Games' loss widened to €24 million ($28.21 million) from €1 million ($1.18 million).

Vivendi's net debt at the end of May was about €14 billion ($16.46 billion), compared with €15.3 billion ($17.98 billion) at the end of March, and €12.3 billion ($14.46 billion) on Dec. 31, 2002.

In addition, the world's No. 2 media group reaffirmed its full-year forecast operating-profit expectations for the full year and predicted a 'sharp improvement' in its operating cash flow, which was €928 million ($1,090.77 million) in the first quarter.

Separately, the Paris-based Vivendi announced a June 23 deadline for collecting from buyers who seek at least a piece of its U.S. entertainment assets, including Universal Studios, cable networks USA and Sci-Fi and its theme parks business.

The stock gave up 68 cents, or 3.3%, to 19.95 in regular trading on the New York Stock Exchange (NYSE).

Shares of Red Hat Inc. (RHAT: chart) rallied more than 5% in extended trading after the Linux software developer swung to a first-quarter profit on strong revenue.

The company had a 2004 first-quarter profit of $1.5 million, or 1 cent a share versus a net loss of $4.6 million, or 3 cents a share, in the comparable quarter last year. Earnings were in line with analysts' mean estimates.

For the quarter ended May 31, 2003, sales rallied 39% to $27.2 million from $19.5 million a year earlier.

The Raleigh, N.C.-based company generated $5.5 million in positive cash flows from operations in the quarter. Net operating loss narrowed to $1.1 million from $7.2 million a year ago.

Red Hat said it expects to generate second-quarter sales of $28 million to $28.5 million. The company also sees a profit in the range of $2.3 million to $2.8 million, or 1 cent a share.

The stock gained 43 cents, or 5.29%, to 8.52 in after hours. On the Nasdaq Stock Exchange, shares had traded up 1 cent at 8.09.

Shares of Pfizer Inc. (PFE: chart) rose more than 4% in Tuesday's trading after the pharmaceutical giant boosted its profit and revenue outlook for 2004 and raised its expectations for merger-related savings. However, the company lowered its earnings projection for 2003.

The No. 1 drug maker now anticipates 2003 net income of 79 cents a share. Excluding items such as merger-related costs, Pfizer expects to earn $1.73 a share, down from its earlier projection of $1.80 a share.

For 2004, the company expects to earn $2.13 a share, excluding one-time charges, on revenue of $54 billion – and would thus exceed analysts' mean estimates of $2.06 a share and $52.4 billion, respectively.

Pfizer completed its acquisition of Pharmacia Corp. on April 16, 2003. The two companies had combined top line of about $45 billion in 2002. Pfizer said that its 2004 estimates represent 10% compound annual revenue growth and 16% compound annual earnings growth from the 2002 results.

David Shedlarz, the company's chief financial officer, said that cost savings from the merger would be higher than expected. Pfizer expects to realize cost synergies of $1 billion by the end of the current year, $3 billion by the end of 2004 and $4 billion by the end of 2005.