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Time Warner Stock Drops 9 Percent After CEO Jeff Bewkes Projects Lower Earnings

Bewkes hints at keeping content rights away from streaming services longer

A forecast for lower 2016 earnings triggered a nine percent drop in Time Warner stock in early morning trading.

Time Warner announced third quarter earnings on Wednesday, and CEO Jeff Bewkes said he’s evaluating whether the company should keep its content rights longer, thus making streaming outlets wait for television and movie programming.

Bewkes hinted at the potential move during the Time Warner earnings call, which would extend the streaming on-demand window to a multiyear timeframe instead of traditional syndication. HBO, of course, has its own streaming service, HBO Now.

Bewkes predicted adjusted earnings of $5.25 per share next year, down from a consensus $5.60 per share.

He also forecast “aggressive” investments in the form of “new digital product and infrastructure,” adding that the company plans on spending hundreds of millions of dollars on new content and technology.

Time Warner blew past Wall Street expectations for its third quarter Wednesday, powered by strong growth from Warner Bros. and HBO, which were up 15 percent and 5 percent, respectively. Video games like “Lego Dimensions” and “Mad Max” were strong points for Warner Bros.

For HBO, a boost in domestic subscription rates along with higher domestic licensing sales helped boost the premium cable service.