By Nick Kostov 

PARIS--Shares in Vincent Bollore's Vivendi SA dropped more than 5% on Friday, as the French media company reported lower-than-expected core profit for 2016.

Earnings before interest, taxes and amortization--which analysts consider an important measure of the firm's performance--fell 23% to EUR724 million, pressured by its pay-TV business, Canal Plus, Vivendi said.

Net profit dropped 35% to EUR1.26 billion, while revenue rose 0.5% to EUR10.82 billion.

Vivendi is putting the pieces together for a media empire focused on Southern Europe with interests in TV, music and videogames. Mr. Bolloré has ruffled feathers in recent months, falling out with the founders and managers at videogame publisher Ubisoft SA and more recently with MediaSet SpA.

Vivendi said revenue should increase more than 5% this year and core earnings by around 25%.

Canal Plus, which accounts for more than half the company's sales, posted a 44% decline in profit from operations last year, pressured by its pay-TV operations in mainland France while the international operations lifted earnings. The unit has suffered from competition for sports rights and from online video services in recent years.

Universal Music Group, meanwhile, has been a bright spot, thanks to a large jump in online streaming, which has offset continuing declines in sales of CDs and digital downloads. It made an operating profit of EUR687 million, an increase of 9.8%.

"Results were below expectations with music growing nicely but margins light, and Canal suffering in France and in content," said Exane analyst Charles Bedouelle. "The new guidance seems light but could be conservative as well as it might include restructuring," he added.

Vivendi shares dropped 5.5% in morning trading in Paris.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

February 24, 2017 06:09 ET (11:09 GMT)