King Digital jumps while stock of competitor Zynga falls after quarterly earnings reports

Markets Associated Press

Shares of two online game companies moved in opposite directions in premarket trading Friday after King Entertainment trumped fourth-quarter expectations and announced a special dividend, while Zynga did worse than expected on sales and issued a disappointing outlook.

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"Candy Crush" maker King Digital Entertainment said Thursday that its adjusted results for the quarter that ended Dec. 31 totaled 57 cents per share. Analysts surveyed by FactSet expected 47 cents per share.

Pacific Crest Securities analyst Evan Wilson said in a research note that the company's launch of "Candy Crush Soda Saga" went better than expected.

"The company is in a better position with a strong (fourth quarter) reported, but still the future beyond the 'Candy Crush' brand is no more certain now than two quarters ago, which we think is still the key to the story in the intermediate term," the analyst wrote.

King, which went public nearly a year ago, also announced a special dividend of 94 cents per share, payable March 24 to shareholders of record as of March 4.

"FarmVille" maker Zynga Inc. reported on Thursday adjusted fourth-quarter revenue of $182.4 million. Analysts expected $199.8 million, according to Zacks Investment Research.

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For the current quarter ending in March, Zynga expects its adjusted results to range from a loss of 2 cents to 3 cents per share on adjusted revenue of $140 million to $150 million. Analysts surveyed by FactSet expect break-even results and revenue of $193.6 million, on average.

The company plans to launch between 6 and 10 new games in the second half of this year, but Wilson said he was still not confident in Zynga's ability to launch new, revenue-making hits.

Shares of King soared 22 percent, or $3.24, to $17.98 in premarket trading about an hour before the market open, while Zynga's stock sank 12.4 percent, or 33 cents, to $2.33 per share2