Zynga slightly beats Wall Street expectations for Q2

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Zynga

Mark Pincus and Don Mattrick

Zynga reported earnings today for the second quarter that beat Wall Street’s expectations by a sliver.

Zynga hired Xbox chief Don Mattrick as its new CEO on July 1, shifting founder Mark Pincus to chairman and chief product officer. Analysts are looking for some guidance about what the company’s strategic priorities will be in the future and how it can return to consistent profits.

Zynga reported revenues of $231 million, down 31 percent from a year ago, and bookings of $188 million, down 38 percent from a year ago. The company lost $16 million, or 1 cent a share. Analysts expected Zynga to report a loss of 2 cents a share on bookings of $181.2 million for the second quarter.

In June, Zynga said it expected a loss of 3 to 4 cents per share on revenue ranging from $225 million to $235 million. Last year, Zynga’s second quarter revenue came in at $332 million and earnings per share loss of 3 cents to 5 cents. The company also made cutbacks at various game studios around the world.

Zynga traded at $3.28 a share on Wednesday. That is a healthy premium compared to below $2.60 a share in the days before the company announced Mattrick as the new CEO. But questions remain about Zynga’s ability to shift into mobile games, where Mattrick has little experience. In after-hours trading, Zynga shares are flat at $3.48 a share. During the trading day before the release came out, Zynga’s stock price was up 6 percent.

Rivals have been eating into Zynga from all directions. King’s Candy Crush Saga is now a bigger game on Facebook than any of Zynga’s titles. King is No. 1 with more than 147 million monthly active users on Facebook, while Zynga is at No. 2 with 135.9 million. Zynga’s highest-ranking Facebook game is FarmVille 2 with 33 million, but Candy Crush Saga has more than 44 million.

Facebook reported earnings yesterday. Zynga recently released its Dojo Mojo action-strategy game on Facebook. But the competition remains stiff. For the third quarter, analysts expected Zynga to report a loss of 2 cents a share on bookings of $193 million.

Zynga is shifting more resources to mobile and is just beginning to launch real-money gambling games.