By Abhirup Roy
(Reuters) - Time Warner Inc (N:TWX) reported a steeper-than-expected drop in quarterly revenue as subscription revenue for its cable channel HBO and Turner television network disappointed Wall Street, sending the company's shares down as much as 8 percent.
Revenue at Warner Bros, the company's movie studio, also fell 13 percent, hurt by a lack of hit movie releases and a strong dollar, overshadowing a quarterly profit beat and a raised profit forecast for the year.
The company's shares fell to $57 in morning trading, their lowest since March 2013. They later pared most of their losses to trade down less than 1 percent at $62.82.
While revenue in HBO and the Turner division rose slightly, several analysts said subscription revenue in these businesses were below their expectations.
Subscription revenue for HBO, home to shows such as "Game of Thrones", rose 3 percent and remained unchanged at Turner, which includes the cable channel CNN.
Jefferies analysts expected HBO subscription revenue to grow 4 percent and Turner's to grow 1 percent.
Investors and analysts worry that companies like Time Warner and Walt Disney Co (N:DIS) are being abandoned by "cord cutters," especially younger viewers who are shifting to online services such as Netflix (O:NFLX) and Hulu.
Walt Disney Co (N:DIS) said on Tuesday operating income at its media networks unit, which includes ESPN and the Disney Channels, slipped due to subscriber declines and higher programming costs.
To check the fall in subscriber numbers, companies have started offering cheaper, slimmed-down channel bundles that offer viewers some flexibility in terms of options.
NEW BUYBACK, DIVIDEND RAISE
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 buyback was effective Jan. 1 and includes the amount remaining under a prior authorization, the company said.
The company also raised its 2016 adjusted profit forecast to $5.30-$5.40 per share for 2016.
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.
Up to Tuesday's close of $63.21, the company's stock had fallen 21.5 percent in the past 12 months.