Time Warner Inc (TWX.N), the owner of cable channels CNN and HBO and movie studio Warner Bros, reported a steeper-than-expected 6 percent drop in quarterly revenue, hurt by a lack of hit movie releases and a strong dollar.
The company’s shares were down 8.6 percent in premarket trading on Wednesday and were set to open at their lowest since August 2013.
Revenue at Warner Bros fell 13 percent to $3.3 billion. In the year-earlier quarter, the studio released hit movies such as “The Hobbit: The Battle of the Five Armies”, “Interstellar” and “Annabelle”.
Revenue in the company’s HBO network, home to shows such as “Game of Thrones”, rose 5.5 percent, while revenue in the Turner division, which includes CNN, rose 2 percent.
Subscription grew 3 percent at HBO and remained flat at Turner. Several analysts said the subscription growth were below their expectations.
Cable companies and broadcasters have been hit by a shift of viewers to online services such as Netflix (NFLX.O) and Hulu.
Walt Disney Co’s (DIS.N) media networks unit, which includes ESPN and the Disney Channels, reported a 5.6 percent decline in operating income on Tuesday due to a subscriber decline at ESPN and higher programming costs.
Time Warner set a $5 billion share buyback program and raised its quarterly dividend to 40.25 cents per share from 35 cents on Wednesday.
The company also raised its 2016 adjusted profit forecast to $5.30-$5.40 per share for 2016. Analysts on average were expecting $5.26, according to Thomson Reuters I/B/E/S.
“The source of the upside is unclear, but we assume it’s a combination of fine-tuning the initial $5.25 guidance, better cost controls, a slightly better ad outlook and non-operating items,” Jefferies analyst John Janedis wrote in a note.
In November, the company had cut its profit forecast to $5.25 per share from “close to $6”, citing a strong dollar.
Net income attributable to Time Warner shareholders rose to $857 million, or $1.06 per share, in the fourth quarter ended Dec. 31 from $718 million, or 84 cents per share.
Excluding items, the company earned $1.06 per share, higher than the estimated $1.01.
Revenue fell to $7.08 billion, missing estimates of $7.53 billion.
The $5 billion share buyback was effective Jan. 1 and includes the amount remaining under a prior authorization, the company said.
Up to Tuesday’s close of $63.21, the company’s stock had fallen 21.5 percent in the past 12 months.
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