PARIS, France (Reuters) – Vivendi Universal reported a four-percent decline in third-quarter comparable core revenue on Monday as music industry woes and a smaller slate of movie blockbusters conspired to erode sales.

The world’s number two media company, which is restructuring after running up huge debts, said quarterly sales excluding water unit Vivendi Environnement fell four percent to 7.367 billion euros ($7.46 billion) on a proforma basis, or once the impact of various merger deals had been smoothed out. Actual sales rose one percent. The figures included a nine-percent drop in third-quarter sales at Universal Music Group (UMG) to 1.328 billion euros, caused mainly by the strength of the euro against the dollar but also higher provisions for returns and lower manufacturing revenue.

The United States, the world’s biggest music market, saw activity in the music industry shrink by 12.4 percent in the third quarter. UMG’s share of current albums actually rose to 31.4 percent, parent Vivendi said in a statement.

Sales at Vivendi Universal Entertainment, which includes Universal Studios, nominally rose seven percent due to the acquisition of the entertainment assets of USA Networks, but fell 24 percent on a proforma basis to 1.291 billion euros.

The fall was triggered by fewer theatrical releases compared with a bumper year in 2001 when Universal’s big draws included Jurassic Park III, American Pie II and Bridget Jones’s Diary.

Vivendi’s publishing division posted a 14-percent drop in quarterly sales to 1.211 billion euros, equivalent to a one-percent drop in proforma terms.

Vivendi recently broke up and sold its publishing assets to help make a dent in its 19 billion-euro mountain of media debt inherited from its past expansion.

Europe’s pay-television leader Groupe Canal+, which now incorporates international TV revenue from Universal, boosted actual third-quarter sales by five percent to 1.167 billion euros, for a proforma rise of four percent.

For the first nine months of a tumultuous year, which saw the ouster of former Chief Executive Jean-Marie Messier, a cash squeeze and a massive first-half loss, Vivendi posted a five percent rise in proforma sales excluding Environnement to 22.565 billion euros.

Actual sales excluding the water and sewage division rose 13 percent to 22.406 billion euros.

Total nine-month group sales rose nine percent to 44.541 billion euros. The proforma rise was five percent, Vivendi said.

Vivendi last week set out plans to sell off its water business, the world’s largest, in two stages over the next two years for roughly four billion euros.

The move is expected to help Vivendi try to grab control of telecom venture Cegetel.

Vivendi reported a nine percent rise in third-quarter revenue to 1.804 billion euros at Cegetel, in which it owns 44 percent.

In New York, Vivendi’s U.S.-listed stock was down just over two percent shortly after the revenue announcement.

Vivendi Universal shares in Paris earlier slipped 0.5 percent to 13.73 euros in holiday-thinned trading.