epa05152750 (FILE) A file photo datewd 13 February 2014 showing a general view of the entrance of Time Warner Center in New York City, New York, USA. Time Warner released their 4th quarter 2015 results on 10 February 2016, saying their full-year revenues and adjusted operating income increased 3 per cent and 19 per cent from 2014 to 28.1 billion USD and 6.9 billion USD, respectively, due to growth across all operating divisions, while net income was at 3.83 billion USD. Operating income increased 15 per cent from 2014 to 6.9 billion USD. EPA/JASON SZENES
BENGALURU: Time Warner Inc, the owner of cable channels CNN and HBO and movie studio Warner Bros, reported a steeper-than-expected 6% drop in quarterly revenue, hurt by a lack of hit movie releases and a strong dollar.
The company’s shares were down 8.6% in pre-market trading on Wednesday and were set to open at their lowest since August 2013.
Revenue at Warner Bros fell 13% to US$3.3bil (RM13.6bil). 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%, while revenue in the Turner division, which includes CNN, rose 2%.
Subscription grew 3% 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 and Hulu.
Walt Disney Co’s media networks unit, which includes ESPN and the Disney Channels, reported a 5.6% decline in operating income on Tuesday due to a subscriber decline at ESPN and higher programming costs.
Time Warner set a US$5bil (RM20.7bil) share buyback programme 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 US$5.30-US$5.40 per share for 2016. Analysts on average were expecting US$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 US$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 US$5.25 per share from “close to US$6”, citing a strong dollar.
Net income attributable to Time Warner shareholders rose to US$857mil (RM3.54bil), or US$1.06 per share, in the fourth quarter ended Dec 31 from US$718mil (RM2.97bil), or 84 cents per share.
Excluding items, the company earned US$1.06 per share, higher than the estimated US$1.01.
Revenue fell to US$7.08bil (RM29.25bil), missing estimates of US$7.53bil (RM31.1bil).
The US$5bil share buyback was effective Jan 1 and includes the amount remaining under a prior authorisation, the company said.
Up to Tuesday’s close of US$63.21, the company’s stock had fallen 21.5% in the past 12 months. - Reuters
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