This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Zynga Jumps as Games Win Facebook Popularity

NEW YORK (TheStreet) -- Zynga (ZNGA), best known for the popular Facebook (FB) game FarmVille, was gaining Friday on better-than-expected third-quarter results that reflected growth from its widening portfolio even as the company operates in the red. Shares were rising 13% to $3.99 in mid-day trading.

For the three-month period ended Sept. 30, the social-gaming company reported a third-quarter loss of 2 cents a share, beating Thomson Reuters estimates by 2 cents. Revenue totaled $152.1 million, 41% lower than the same period a year earlier but beating estimates by $9.4 million.

The San Francisco-based company continues to show growth after announcing it would refocus operations on core franchises. By the end of the quarter, Zynga had 3 of the top 10 games on Facebook based on daily average users.

"Our teams are working hard to compete more aggressively on the web, move to mobile and develop new hits," said CEO Don Mattrick in a statement. "We believe our top franchises -- Zynga Poker, FarmVille and Words With Friends -- can be evergreen in terms of consumer interest and we are focused on growing these franchises in fiscal year 2014."

Come the New Year, this will remain a challenge as engaged-users is expected to fall. DAUs dropped to 30 million, down 49% on the year-ago quarter and 23% quarter-by-quarter. Monthly active users (MAUs) were 57% lower to 133 million on a year-on-year basis, and down 29% since the second quarter 2013.

Costs were kept in check, however, as the company completed restructuring efforts. Lay-offs affected 520 positions or 18% of total global workforce during the quarter.

"We are dedicated to improving employee efficiency by leveraging smaller, more focused teams on new intellectual property and redeploying talent through our largest franchises," explained CFO Mark Vranesh in a conference call.

The company also announced it had hired Clive Downie, former executive of mobile gaming company DeNA Co, as its new chief operating officer in a play to expand mobile reach.

For the fourth-quarter, the company forecasts revenue between $175 million and $185 million, and earnings loss between 5 and 4 cents, below Yahoo! Finance estimates of a 3-cent loss.

TheStreet Ratings team rates Zynga Inc as a Sell with a ratings score of D. The team has this to say about their recommendation:

"We rate Zynga Inc (ZNGA) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,031.14 +43.63 0.26%
S&P 500 1,984.13 -1.41 -0.07%
NASDAQ 4,518.9020 -48.6960 -1.07%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs