
Here's Why Time Warner (TWX) Stock Is Tanking Today
NEW YORK (TheStreet) -- Time Warner (TWX) stock is lower by 10.14% to $69.46 in late morning trading on Wednesday, as reduced fiscal 2016 guidance outweighs the company's 2015 third quarter earnings and revenue beat.
On its earnings conference call this morning, the media and entertainment company announced it expects 2016 adjusted earnings near $5.25 per share, short of estimates of $5.60 per share, according to Bloomberg. Time Warner reaffirmed its 2015 earnings outlook for a range between $4.60 per share and $4.70 per share.
Before the market open, Time Warner posted adjusted earnings of $1.25 per share for the quarter, up from $1.22 per share for the year ago period. Revenue rose year over year to $6.56 billion, from $6.24 billion for the 2014 third quarter.
Time Warner had been forecast by analysts surveyed by Thomson Reuters to report earnings of $1.09 per share on revenue of $6.51 billion.
Revenue for the company's Warner Bros. segment grew by 15%, helped by higher video games and TV licensing revenues. HBO revenue rose by 4.8%, as shows such as "Game of Thrones" and "True Detective" remain popular, Reuters reports.
"Our revenue growth was led by Warner Bros. and Home Box Office, and illustrated how our investments in great content have been paying off in our traditional television businesses, as well as in newer areas such as videogames," CEO Jeff Bewkes said in a statement.
Shares of the company had climbed by 2.2% to $79 in pre-market trading today, according to Bloomberg.
Separately, TheStreet Ratings team rates TIME WARNER INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate TIME WARNER INC (TWX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: TWX
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