Zynga Inc. (ZNGA) Wednesday posted a profit for the first quarter from a loss last year, when it incurred hefty stock-based expenses. Adjusted earnings declined from a year ago, largely due to lower revenues reflecting a significant drop in gamers. Nevertheless, earnings for the period topped analysts' estimates by a penny, as did revenues.
Nonetheless, shares of the online social games developer plummeted 10 percent as its second-quarter outlook are forecast to miss current expectations.
Looking forward to the second quarter, Zynga expects a loss of $0.05 to $0.03 per share, adjusted loss of $0.04 to $0.03 per share and revenues of $225 million to $235 million. Analysts polled by Thomson Reuters currently expect a loss of $0.01 per share on revenue of $236.12 million for the quarter. Analysts' estimates typically exclude special items.
Zynga is the world's largest developer of online social games that are popular in social networking sites such as Facebook Inc. (FB) and on mobile platforms. Its offerings include FarmVille, CityVille, Words With Friends, CastleVille, and Zynga Poker.
Revenue growth at Zynga's core games business slackened recently as its user base continues to decline. Daily active users decreased 21 percent to 52 million for the quarter, while monthly active users dropped 13 percent to 253 million.
Zynga's revenues for the first quarter fell 18 percent to $263.59 million from $320.97 million a year ago. Analysts had a consensus revenue estimate of $209.79 million for the first quarter.
Online game revenues slipped 22 percent to $229.6 million, but advertising revenue advanced 21 percent to $34.0 million.
Bookings for the period were $229.8 million, a decrease of 30 percent from last year.
San Francisco, California-based Zynga's profit was $4.1 million or breakeven per share, compared to a loss of $85.4 million or $0.12 per share last year.
Excluding special items, adjusted earnings dropped to $0.01 per share from $0.06 per share a year ago. Twenty-one analysts, on an average, expected a loss of $0.04 per share for the quarter.
ZNGA closed Wednesday's regular trading at $3.35, up $0.17 or 5.31%, on a volume of 44.7 million shares on the Nasdaq. The stock, however, plunged $0.34 or 10.12% in after hours.
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