Earnings Preview: SolarCity Corp, Zynga Inc

Earnings Preview: SolarCity Corp, Zynga Inc
By BrokenSphere (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

SolarCity Corp (NASDAQ:SCTY) and Zynga Inc (NASDAQ:ZNGA) both are scheduled to report their fiscal second-quarter results on Thursday, August 7 after the market closes. Both stocks are soaring ahead of earnings. SolarCity jumped 3.99% to $75.77 while Zynga shares gained 1.79% to $2.84 at 12:26 PM EDT on Thursday. Let’s have a look at what analysts expect from the companies at their respective earnings calls.

SolarCity’s Q2 loss expected to widen

Wall Street expects the largest U.S. residential solar installer‘s second-quarter loss to widen from just 31 cents last year to 99 cents or $73.3 million in the latest quarter. The consensus estimate has gotten worse over the last 90 days. About three months ago, analysts expected the company to incur 64 cents in Q2 losses. But as the earnings release date approached, their loss estimated widened to 99 cents a share.

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Anyway, its revenue will keep rising sharply. Analysts forecast SolarCity’s June quarter revenue to rise 66.60% YoY to $63.24 million. Investors also expect the San Mateo-based company to shed light on its $200 million acquisition of Silevo. Along with the acquisition, SolarCity also unveiled its plan to build one of the world’s largest panel manufacturing plants in New York.

Zynga’s Q2 revenue to show nominal growth

Zynga has been struggling for more than two years. The company has laid off workers, undergone restructuring, and launched several new titles to bring its business back on track. But it will take a few more quarters for the new growth plans to have any meaningful impact on the gaming company’s financial performance, says BMO Capital Markets analyst Edward S. Williams.

BMO Capital Markets expects the San Francisco-based company to post adjusted EBITDA of $17.2 million on bookings of $189 million. Of course, BMO is a bit more conservative than the Wall Street consensus of $191 million in bookings and $18.3 million in adjusted EBITDA. Zynga had reported $8.3 million in EBITDA on bookings of $188 million in the same quarter last year.

Zynga holds about $1.1 billion, or more than 40% of its market value, in cash. Analysts are also looking for updates on Zynga’s restructuring efforts that have increasingly focused on mobile gaming. The company’s own guidance calls for $10-$20 million in adjusted EBITDA and $175-$195 million in bookings.

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