(Reuters) - Time Warner Inc (N:TWX) cut its 2016 adjusted profit forecast, citing a strong dollar, sending its shares plunging more than 8 percent on Wednesday.
The company said it now expected earnings of $5.25 per share, compared with its earlier forecast of "close to $6". Analysts on average had expected earnings of $5.60 per share.
Time Warner expects the impact of a stronger dollar to be about the same in 2016 as in 2015, at around 50 cents per share, Chief Executive Jeff Bewkes said on a call with analysts.
Time Warner's shares were down slightly in earlier trading after the company reported better-than-expected third-quarter profit and revenue, boosted by higher HBO subscription fees and a rise in licensing revenue at its Warner Bros. studio business.
Revenue at Warner Bros. rose about 15 percent in the quarter ended Sept. 30, helped by the releases of the "LEGO Dimensions" and "Mad Max" videogames.
The syndication of TV shows "2 Broke Girls" and "Person of Interest" also boosted revenue at the studio, which accounts for about 49 percent of Time Warner's total revenue.
Revenue at HBO increased 4.8 percent as more people signed up for popular shows such as "Game of Thrones" and "True Detective".
Media companies including Time Warner and Walt Disney Co (N:DIS) are remodeling their businesses to grab a larger share of the video-streaming market as consumers increasingly take to watching TV shows online, a trend dubbed as "cord cutting".
The company, which has exceeded profit estimates in the first three quarters of 2015, did not raise its full-year profit forecast. Time Warner previously forecast full-year 2015 adjusted profit of $4.60-$4.70 from continuing operations.
"Are they being conservative or is there something specific in the fourth quarter that provides a reason for people to lower their numbers?" MKM Partners analyst Eric Handler said before the analysts' call.
Jefferies analysts said in a note after the publication of the results that they assumed that some of the company's expenses shifted into the fourth quarter from the third quarter.
Time Warner's total revenue rose 5.1 percent to $6.56 billion in the three months ended Sept. 30.
Net income attributable to Time Warner shareholders rose 7 percent to $1.04 billion, or $1.26 per share. Excluding items, it earned $1.25 per share.
Analysts on average expected earnings of $1.09 per share on revenue of $6.51 billion, according to Thomson Reuters I/B/E/S.
Time Warner's stock had fallen about 9.5 percent this year through Tuesday, compared with a 1.5 percent rise in the S&P 500 Movies & Entertainment index <.SPLRCENTE>.