$ZNGA News Zynga Posts Surprise Profit on Lower
Post# of 29735
Posted On: 04/25/2013 7:15:55 AM
$ZNGA News
Zynga Posts Surprise Profit on Lower Costs
Zynga Inc. (ZNGA) posted a surprise first-quarter profit as the embattled social-games maker trimmed costs significantly, though bookings fell nearly as much.
Shares sank 13% after hours to $2.90 after the company projected weak second-quarter results. As of Wednesday's close, the stock was up 42% so far this year.
For the current quarter, the company expects an adjusted per-share loss of three cents to four cents, on bookings of $180 million to $190 million. Analysts polled by Thomson Reuters recently projected a loss of a penny a share on bookings of $232 million.
The San Francisco-based company has struggled to recapture the buzz that propelled its early games and established it as a leader in social titles. Newer games have failed to gain traction and financial results have slumped, due in part to declining exposure on Facebook Inc.'s (FB) social networking site, traditionally a primary platform. As fewer Facebook users tap into Zynga games like "FarmVille" and pay real money for items like digital livestock, Zynga has seen its sales steadily drop.
As Zynga has worked to retrench, the company has sought to lay plans for a new foray into real-money gambling. Zynga enables players to buy into games like poker with real money, but cash out only in virtual currency. The company also reshuffled its top managers several times last year and in February said it would cut about 1% of its staff, shutter its Baltimore office and consolidate to reduce costs.
For the latest period, Zynga reported a profit of $4.1 million, or less than a penny a share, compared with a year-earlier loss of $85.4 million, or 12 cents a share. The latest period included stock-based compensation of $29.9 million, down from $133.9 million a year earlier. Excluding those costs and other impacts, per-share earnings fell to a penny a share from six cents.
Bookings, or the actual value of virtual goods Zynga sells in games, sank 30% to $229.8 million.
Zynga in February forecast an adjusted loss of four cents to five cents and bookings of $200 million to $210 million.
Total expenses fell 34% to $268.5 million.
Daily active users shrank to 52 million, from 65 million a year earlier and from 56 million in the prior quarter.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
Zynga Posts Surprise Profit on Lower Costs
Zynga Inc. (ZNGA) posted a surprise first-quarter profit as the embattled social-games maker trimmed costs significantly, though bookings fell nearly as much.
Shares sank 13% after hours to $2.90 after the company projected weak second-quarter results. As of Wednesday's close, the stock was up 42% so far this year.
For the current quarter, the company expects an adjusted per-share loss of three cents to four cents, on bookings of $180 million to $190 million. Analysts polled by Thomson Reuters recently projected a loss of a penny a share on bookings of $232 million.
The San Francisco-based company has struggled to recapture the buzz that propelled its early games and established it as a leader in social titles. Newer games have failed to gain traction and financial results have slumped, due in part to declining exposure on Facebook Inc.'s (FB) social networking site, traditionally a primary platform. As fewer Facebook users tap into Zynga games like "FarmVille" and pay real money for items like digital livestock, Zynga has seen its sales steadily drop.
As Zynga has worked to retrench, the company has sought to lay plans for a new foray into real-money gambling. Zynga enables players to buy into games like poker with real money, but cash out only in virtual currency. The company also reshuffled its top managers several times last year and in February said it would cut about 1% of its staff, shutter its Baltimore office and consolidate to reduce costs.
For the latest period, Zynga reported a profit of $4.1 million, or less than a penny a share, compared with a year-earlier loss of $85.4 million, or 12 cents a share. The latest period included stock-based compensation of $29.9 million, down from $133.9 million a year earlier. Excluding those costs and other impacts, per-share earnings fell to a penny a share from six cents.
Bookings, or the actual value of virtual goods Zynga sells in games, sank 30% to $229.8 million.
Zynga in February forecast an adjusted loss of four cents to five cents and bookings of $200 million to $210 million.
Total expenses fell 34% to $268.5 million.
Daily active users shrank to 52 million, from 65 million a year earlier and from 56 million in the prior quarter.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
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