Zynga Inc (ZNGA) Shares Soar After Surprise Results

Zynga Inc (ZNGA) Shares Soar After Surprise Results

Zynga Inc (NASDAQ:ZNGA) surprised Wall Street with fourth quarter results that were better than expected and a week earlier than expected, sending shares up more than 23% in after-hours trading. The company’s results still weren’t spectacular, but it provided additional plans for continuing to cut costs. And the game maker released its numbers a week before it was scheduled to release them.

Zynga continues to post losses

For the December quarter, Zynga Inc (NASDAQ:ZNGA) reported revenue of $176 million, compared to the $141 million in revenue Wall Street was expecting. It was also a bit higher than the high end of the guidance provided by the company. It’s still lower than last year’s fourth quarter revenue of $261 million, however. The game maker also posted losses of 3 cents per share, which was one cent better than Wall Street was expecting. Bookings for the quarter were $147 million, a 44% decline year over year.

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Zynga Inc (NASDAQ:ZNGA) also reported that user names are still falling across the board. The company reported a 12% decline in daily active users compared to the previous quarter. Monthly active users fell 16% compared to the previous quarter.

Breaking down Zynga’s results

However, investors were probably pleased to hear that the players who did stick around paid more to play the company’s games. Average daily bookings per active daily user rose 10% sequentially. The company reported a 33% sequential increase in Words with Friends bookings, which is the highest quarterly bookings in the game’s five-year history. The game maker also reported that its Casino franchise saw sequential quarterly bookings growth for the first time in the last 18 months. Zynga Poker saw its mobile monthly active users grow 8% sequentially.

Zynga Inc (NASDAQ:ZNGA) launched its new mobile slots game Hit it Rich! on tablets, and it currently is the top game on the free iPad game charges in the Casino category.

Zynga announces job cuts, acquisition

Zynga Inc (NASDAQ:ZNGA) also announced plans to eliminate more jobs. This time, it plans to cut 15% of its workforce, which would be around 300 workers. The company said it expects to generate about $33 million to $35 million in pretax savings for 2014 through its workforce reduction plan.

The game maker also announced that it will acquire mobile game and technology developer NaturalMotion, which developed the hit games CSR Racing and Clumsy Ninja.

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