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Zynga (ZNGA) Posts Surprise Q4 Profit, Revenue Forecast Tops Street

 February 05, 2013 04:15 PM


(By Balachander) Zynga Inc. (NASDAQ: ZNGA) reported an unexpected profit for the fourth quarter amid flat revenue and sharp drop in expenses and the social gaming company guided revenue above Wall Street projections.

Shares gained 6.20 percent in extended trading on Tuesday.

On a non-GAAP basis, the San Francisco-based company earned a cent per share, versus market expectations of a loss of 3 cents a share for the fourth quarter.

GAAP loss was $48.56 million, compared with a loss of $435 million in the comparable period of last year.

Revenue was $311 million, flat with last year, while Wall Street analysts projected a drop of 31 percent to $212 million. Online game fell 3 percent. Advertising revenue jumped 35 percent.

[Related -Why Investing In IPOs Is A Foolish Move]

Bookings fell 15 percent to $261 million.

Daily active users (DAUs) increased 3 percent to 56 million on a year-over-year basis.

Total costs and expenses dropped 66 percent.

In the preceding third quarter, Zynga posted breakeven earnings on a non-GAAP basis and a loss of 7 cents on a GAAP basis. The company recorded revenue of $317 million.

Looking ahead for the first quarter, the company expects non-GAAP loss to be between 4 cents and 5 cents on revenue in the range of $255 million to $265 million. Zynga forecast bookings in the range of $200 million to $210 million. Analysts expect a loss of one cent on revenue of $240 million.

Late last year, the online social gaming company amended terms of agreement with Facebook (NASDAQ: FB). Zynga will no longer be separately obligated to display Facebook ad units or implement Facebook credits on any such Zynga game pages.

[Related -Zynga Inc. (ZNGA) Q2 Earnings Preview: Shareholders Hoping for Bad Data]

The stock, which has been trading in the 52-week range of $2.09 to $15.91, ended at $2.74 on Tuesday.

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