Zynga Stock Jumps 6% After Beating Q4 Earnings Estimates
Zynga reported better-than-expected revenue and earnings for the fourth quarter, but the business still has a long way to go towards profitability.
The gaming company reported earnings per share of $0.01 on revenue of $311.2 million in the December quarter, coming in well ahead of Wall Street’s consensus estimate for EPS of -$0.03 on revenue of $212 million. Zynga also reported bookings of $261.3 million for the quarter, beating estimates of $222.4 million.
This, combined with better-than-expected guidance for the first quarter of 2013, helped push the stock price up by as much as 7% in after hours trading. However, this may be more of an indication of Wall Street’s low expectations for the company than a significant improvement in Zynga’s business.
Even though revenues beat estimates, they were still flat year-over-year. Likewise, bookings declined 15% from the same quarter in 2011. What’s more, both monthly and daily active users were down quarter-over-quarter.
Despite the company’s efforts to cut costs by eliminating games and laying off employees, Zynga still reported a net loss of more than $48 million. That’s a significant improvement from the $435 million net loss the company posted in the same quarter a year ago, but most of that loss in 2011 was related to employee stock compensation costs resulting from Zynga’s IPO.
In total, Zynga posted a net loss of more than $200 million for all of 2012. That may be better than what analysts had expected, but the company has a long way to go before it can be considered a winner.
Image courtesy of Flickr, Incase
Previous Post: Ten Tips To Raise Happy Kittens
Next Post: Adorable Toddler Attempts Reading Peter Piper Tongue Twister