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(Reuters) - Time Warner Inc (TWX.N) reported a bigger-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 9.8 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 an increased profit forecast for the year.
The company's shares fell to $57, their lowest since March 2013, before paring most of the losses to trade at $60.78, down less than 4 percent.
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.
"We continue to expect domestic subscription revenue growth to accelerate into the low teens starting in the first quarter," Chief Financial Officer Howard Averill said on a conference call with analysts.
Investors and analysts worry that companies such as Time Warner and Walt Disney Co (DIS.N) are being abandoned by "cord cutters," especially younger viewers who are shifting to online services such as Netflix (NFLX.O) and Hulu.
Walt Disney Co (DIS.N) 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 are offering cheaper, slimmed-down channel bundles to give viewers more options.
HBO CEO Richard Plepler said the company had no plans to lower the premium price of HBO Now - its online streaming service - given "enormous amount of growth in the ecosystem".
Time Warner set a $5 billion share buyback program and raised its quarterly dividend on Wednesday to 40.25 cents per share from 35 cents. The buyback included an amount remaining under a prior authorization.
The company raised its 2016 adjusted profit forecast to $5.30-$5.40 per share for 2016.
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, Time Warner stock had fallen 21.5 percent in the past 12 months.
Reporting by Abhirup Roy in Bengaluru; Editing by Don Sebastian and Sayantani Ghosh