Zynga Inc.'s surprise profit in the first three months of the year got
overshadowed by a revenue decline, a drop in the number of users and a
lower-than-expected second-quarter forecast.
The online game maker's stock fell more than 10 percent in extended trading Wednesday after the first-quarter results came out.
which makes "FarmVille" and other games, said Wednesday that it earned
$4.1 million, which was breakeven per share. A year earlier, it lost
$85.4 million, or 12 cents per share. Adjusted earnings were 1 cent per
share in the latest quarter, compared with expectations for a loss of 3
Revenue fell 18 percent to $263.6 million, from $321 million.
Analysts, on average, had expected revenue of $264.5 million, according to FactSet.
demand for its Facebook games fades, Zynga has cut jobs, closed game
studios and shut down games to reduce expenses and focus only on popular
titles. The quarter's expenses fell 34 percent to $268.5 million, from
The number of people who play Zynga games at least
once a month fell 13 percent to 253 million, from 292 million a year
earlier. The number of daily players dropped 21 percent to 52 million,
from 65 million.
CEO Mark Pincus said in a statement that 2013
will "continue to be a transition year." Zynga, whose games are played
mainly on Facebook's website, is working on shifting to mobile games and
to its own site off of Facebook.
(Also see: Zynga relaunches gaming site, loosens Facebook ties)
For the current quarter, Zynga
is forecasting an adjusted loss of 3 cents to 4 cents per share on
revenue of $225 million to $235 million. Analysts were expecting a loss
of 1 cent per share on revenue of $258.1 million.
Shares of San
Francisco-based Zynga fell 34 cents, or 10.1 percent, to $3.01 in
after-hours trading. The stock had closed up 17 cents, or 5.3 percent,
at $3.35 before the results came out.