Cisco Systems, Inc. Up After Earnings, Zynga Inc Falls

Cisco Systems, Inc. Up After Earnings, Zynga Inc Falls
By Cisco [Public domain], <a href="">via Wikimedia Commons</a>

Zynga and Cisco Systems released their latest quarterly earnings reports after closing bell tonight. Cisco Systems posted adjusted earnings of 57 cents per share and revenue of $11.9 billion, which was flat with last year, for the second quarter of its fiscal 2016. Analysts had been looking for earnings of 54 cents per share and $11.76 billion in revenue. Reported earnings were 62 cents per share, a significant increase from the previous year’s 46 cents.

Zynga was breakeven on an adjusted basis, which was in line with consensus, but surprised on revenue, coming in at $185.5 million, compared to the consensus of $178.7 million for the fourth quarter.

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Cisco Systems’s profits rise

Cisco posted GAAP earnings of 62 cents per share. The GAAP gross margin was at 62.3%, with the product margin at 61.3%. GAAP operating expenses fell 7% to $4.1 billion. Deferred revenue climbed 8% to $15.2 billion.

Cisco Systems management guided for third quarter earnings of between 54 cents and 56 cents per share, which is right in line with the consensus of 55 cents, and between a 1% and 4% increase in revenue. They also raised the company’s quarterly dividend 24% and added $15 billion to its share repurchase program.

Cisco shares jumped in after-hours trades, climbing by as much as 7.11% to $24.11.

Zynga’s sales surprise

Zynga posted a GAAP loss of 5 cents per share, which was flat with the fourth quarter of 2014. The game maker reported a 63% year over year growth rate in bookings for 2015 and recorded $182 million in bookings, beating the high end of guidance, and $1.7 million in adjusted EBITDA during the fourth quarter. Zynga’s mobile bookings for the fourth quarter amounted to $134 million, making up 73% of total bookings and climbing 21% year over year. Advertising and other bookings climbed 23% year over year for the quarter. The number of daily active players declined 24% to 18 million, with daily mobile users falling 14%.

The game maker ended the year with $700 million in bookings, representing a 1% increase. Adjusted EBITDA plunged 57% to $17 million for the full year, although mobile bookings climbed 35% while web bookings fell 32%.

Zynga management expects to the first quarter to see between a loss of 1 cent per share and breakeven on an adjusted basis, which is on the weak side as consensus called for breakeven. The game maker expects between $160 million and $175 million, which also was light against the consensus of $172.3 million.

Zynga shares plunged in after-hours trades, falling by as much as 8.45% to $1.95.

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