Time Warner warns on ad revenue as ratings fall, shares plunge
By Anya George Tharakan and Arathy S Nair
(Reuters) - Time Warner Inc (TWX.N: Quote) - the owner of cable channels TNT, TBS Cartoon Network - said ratings for its "key" domestic entertainment networks have dropped more than anticipated, which will result in a fall in ad revenue next year.
The warning, which echoed a similar one from ESPN and ABC-owner Walt Disney Co (DIS.N: Quote) in August, sent Time Warner's shares plunging more than 10 percent on Wednesday.
Cable companies and broadcasters have been hit by a shift of viewers to online services such as Netflix <NFLX.O and Hulu.
Time Warner said it was evaluating whether it should retain rights on its content for a longer period before licensing it to third-party streaming services.
Disney's shares, along with those of Viacom Inc (VIAB.O: Quote) and Discovery Communications Inc DISCA.O, also fell. Shares of Twenty-First Century Fox Inc (FOXA.O: Quote), which reported lower-than-expected quarterly revenue on Wednesay, fell 7 percent.
Time Warner, which also owns ad-free HBO and news channel CNN, also cut its 2016 adjusted profit forecast, citing a strong dollar, and said it would not meet its 2018 earnings forecast of $8 per share.
Chief Executive Jeff Bewkes said Time Warner expected the impact of a stronger dollar to be about the same in 2016 as in 2015, at around 50 cents per share.
Bewkes said that with consumers shifting online, it was important to provide even more on-demand content. Continued...