* Vivendi lowered 2017 outlook late on Jan. 11
* Performance impacted by Canal Plus costs
* Shares among worst performers on Paris stock market (Recasts story, adds details, background)
PARIS, Jan 12 (Reuters) - Vivendi's shares fell on Friday after the media giant said its 2017 profitability would be hit by lingering costs at pay-TV division Canal Plus.
The group, led by French billionaire Vincent Bollore, has overhauled Canal Plus' distribution offers, reshuffled its top management and cut operational costs with the aim of stemming a drop in subscribers and operating losses in France.
Vivendi was among the worst performers on France's benchmark CAC-40 stock market index, falling 1.2 percent to 24.01 euros in early session trading. It also underperformed a flat performance on the STOXX Europe 600 media index.
Shares in Bollore's holding company also dipped by 0.6 percent.
Barclays analyst Julien Roch, who has an "equal-weight" rating on Vivendi shares, said Vivendi's decision to cut its 2017 outlook showed that while Vivendi's UMG music arm was performing strongly, other parts of the business were weaker.
"Overall, missing 2017 estimated guidance and guiding down one of their main divisions in 2019 estimates is clearly not helpful for a stock that is well regarded. This should remind investors that while music is a compelling story, Vivendi comes with other issues that are not altogether positive said Roch.
Other analysts offered a more positive view, with Raymond James' analyst Stephane Beyazian saying Vivendi's overall earnings growth story still looked intact.
"We anticipate the group's earnings growth to be sustainable, as the music market recovery is in a 5-10 year cycle," said Beyazian.
Out of the 26 analysts who cover Vivendi, 15 have "buy" recommendations on the stock, according to Reuters data.
Vivendi said late on Thursday that its 2017 earnings before interest, tax and amortisation (EBITA) would rise between 20 and 25 percent, compared with an earlier target of about 25 percent.
It also expected Canal Plus to yield 500 million euros in EBITA by 2019, or more than twice the amount generated in 2016.
Vivendi also cut its group revenue target for 2017, saying it would increase by close to 5 percent in 2017, compared with a previous forecast of more than 5 percent.
It did not explain the change in the sales forecast. (Reporting by Mathieu Rosemain; Additional reporting by Blandine Henault; Editing by Sudip Kar-Gupta)