Zynga Loss In Line; Stock Up 5%

(RTTNews) - Social games developer Zynga Inc (ZNGA), Thursday reported a wider third-quarter loss, hurt by lower revenues and increased expenses. However, the loss for the quarter was in line with Wall Street estimates, even as its mobile gaming business and advertising strengthened.

Zynga shares gained about 10 percent in the initial after-hours trade on the Nasdaq, but later pulled back. The stock is now up 5.51% at $2.49.

Zynga has been posting consecutive losses with its user base withering. The company, known for its PC games such as Farmville, generates most of its revenues from the virtual-goods purchases made by its online gamers and through ads. But the tide has now turned against it, as gamers spend more time on tablets and smartphones.

The company has been trying to battle it out by developing better mobile games for tablets and smartphones as well as cutting down on costs.

The San Francisco, California-based company posted quarterly net loss of $57 million or $0.06 per share, compared with a loss of $68 thousand or $0.00 per share last year.

Excluding items, adjusted loss for the quarter was $0.01 per share, compared with a loss of $0.02 per share a year ago.

On average, 20 analysts polled by Thomson Reuters estimated a loss of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter declined 13 percent to $176.6 million from $202.6 million in the prior year.

Fourteen analysts had a consensus revenue estimate of $171.7 million for the quarter.

Online game revenue for the quarter slid 20 percent, while advertising and other revenue was up 32 percent, the company said.

Zynga's daily active users for the quarter were 26 million, compared with 30 million in the prior year, and monthly active users slid to 112 million from 133 million.

Bookings for the quarter rose 15 percent from last year to $175 million. Mobile bookings more than doubled and represented 55 percent of total bookings.

Total expenses for the quarter rose to $236 million from $205 million last year.

For the fourth quarter, the company expects non-GAAP results to range between a loss of $0.01 per share and a profit of $0.01 per share, and revenues of $170 million to $200 million. Analysts currently expect earnings of $0.00 per share on revenues of $200.2 million for the quarter.

For the full year, the company estimates adjusted results to range between a loss of $0.02 per share and breakeven earnings per share, while the earlier expectation was for a loss of $0.01 per share to break even per share. Revenues are expected in the range of $668 million to $698 million.

Analysts currently expect a loss of $0.01 per share on revenues of $709 million for the year.

Zynga still expects full-year bookings of $695 million to $725 million.

ZNGA closed Thursday's trading at $2.36, up $0.01 or 0.43%, on a volume of 20.5 million shares. In after hours, the stock gained $0.14 or 5.93% at $2.50.