Zynga (ZNGA) Stock Gains in After-Hours Trading on Earnings Beat

Zynga (ZNGA) shares are higher after the company beat analysts' estimates for earnings in the third quarter.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of Zynga (ZNGA) - Get Report were gaining 1.6% to $2.49 after-hours Tuesday after the social games publisher beat analysts' estimates for earnings in the third quarter.

Zynga reported break even earnings for the third quarter, above analysts' estimates of a loss of 1 cent a share for the quarter. Revenue grew 0.3% year over year to $176 million for the quarter, compared to analysts' estimates of $169.94 million.

"Our teams delivered a strong Q3 driven by the performance by Wizard of OzSlots, Words With Friends and our newly launched Empires & Allies," Founder and CEO Mark Pincus said in a statement. "We generated $176 million in total bookings and $12 million in Adjusted EBITDA, well above the top end of our guidance range. This growth was driven by our three core mobile franchises Slots, Words WithFriends and Poker, which grew 61% year-over-year."

Pincus also announced that the publisher will push back the release of its upcoming Dawn of Titans and CSR2 games to 2016. The CEO said the monetization in the early game of Dawn of Titans makes the game a potential "breakout hit."

Looking to the fourth quarter, Zynga now expects a loss of 1 cent to break even earnings and revenue of $170 million to $185 million. Analysts expect the company to report break even earnings and revenue of $191.79 million for the fourth quarter.

TheStreet Ratings team rates ZYNGA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

We rate ZYNGA INC (ZNGA) a SELL. This is driven by a few notable weaknesses, 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. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: ZNGA

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