Zynga shares climb after 3Q results
(Associated Press Via Acquire Media NewsEdge) NEW YORK (AP) — Zynga shares jumped Friday after the online game maker posted a smaller loss in the third quarter even as its revenue tumbled and the number of people who play its games declined.
THE SPARK: Zynga's loss was smaller than what Wall Street had expected, and while revenue fell 36 percent to $202.6 million, it was still about $13 million more than analyst expectated.
Thursday's results were the first under CEO Don Mattrick, a respected video-game executive who was hired away from Microsoft's Xbox division in July to replace Zynga founder Mark Pincus. Also Thursday, Zynga named Clive Downie as Zynga's chief operating officer. He and Mattrick had worked together at video game publisher Electronic Arts Inc.
BACKGROUND: The San Francisco company has been working on cutting expenses to offset the fading popularity of its games. It laid off 520 employees, or 18 percent of its work force, earlier this year.
ANALYST COMMENT: Zynga is "still in recovery mode," said Baird analyst Colin Sebastian in a note to investors. He thinks there's a good opportunity for Zynga in mobile games and in so-called "mid-core" game space. The latter refers to games that are a notch more complex than your typical "FarmVille" and "Candy Crush Saga" but not quite hardcore like "Grand Theft Auto."
STOCK: Zynga Inc. rose 44 cents, or 12.5 percent, to $3.89 in midday trading. Earlier, the stock hit a 52-week high of $4.05.
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