Zynga's Surprise 4Q Beat Sends Shares Soaring
Zynga (NASDAQ:ZNGA) reported stronger-than-expected fourth-quarter earnings and sales on Tuesday as advertising revenue and average usage improved.
The maker of “Farmville” and “Words with Friends” reported a loss of $48.6 million, or 6 cents a share, compared with a year-earlier loss of $435 million, or $1.22.
Excluding one-time items, the San Francisco-based social games maker said it earned a penny a share, topping average analyst estimates of a three-cent loss, according to a Thomson Reuters poll.
Revenue for the three-month period fell 2% to $311.2 million, but widely topped the Street’s view of $212.1 million. Daily active users grew 3% to 56 million, while advertising revenue soared 35% to $36.8 million.
"Our team executed well in the fourth quarter and made important progress in building sustainable new revenue streams and further aligning our company around our best growth opportunities," said David Ko, Zynga’s chief operations officer.
Shares of Zynga, which closed up 7% in regular trade, climbed another 7% to $2.89 after hours. They got a boost earlier in the day by an upgrade to “buy” from Bank of America (NYSE:BAC).
Zynga, which launched six new titles during the quarter, including CityVille 2, said it is looking toward fiscal 2013, noting it will be a transition year as it focuses on growing its mobile and web presence and expanding its network and profitability.
Looking toward the first quarter, Zynga sees revenue in the range of $255 million to $265 million and a loss per share of 4 cents to 2 cents. Analysts on average are calling for a loss of a penny on sales of $240 million.