Time Warner's Stock Tumbles After Executives Give Disappointing Outlook

Time Warner Inc.'s stock tumbled 8% in midday trade, after the media and entertainment company provided a disappointing outlook for next year. Chief Executive Jeffery Bewkes said on a conference call with investors, according to a transcript provided by FactSet, that 2016 adjusted earnings per share are expected to be around $5.25, below the FactSet consensus of $5.60. He said unfavorable currency movements would reduce EPS by about 50 cents next year. Chief Financial Officer Howard Averill said on the call that ratings at key domestic networks declined more than previously expected, which will hurt ad revenue in 2016. He said subscribers at Turner division's networks have declined about 1% more than anticipated. Earlier, the company reported third-quarter earnings and revenue that were above expectations. The stock has dropped 17% year to date, while the S&P 500 has gained 2.1%.

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