While social-gaming provider Zynga (NASDAQ:ZNGA) posed a net loss for the third quarter, the company’s stock rose after the company announced a $200 million share buy-back program and a planned foray into real-money gambling in the United Kingdom.
The San Francisco-based creator of “FarmVille” and “Words with Friends” has seen its stock fall 79 percent from its December initial public offering price of $10 per share and reported losses in all four quarters. Concerns over its user numbers and reliance on Facebook (NASDAQ:FB) have surrounded the company all year. However, despite another quarter of mixed earnings, shares in the company were trading up by more than 17 percent in pre-market trading Wednesday.
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For the three month period ended in September, Zynga’ revenue beat analysts expectations, while its earnings fell short. The company reported a GAAP loss of 7 cents per share on a revenue of $317 million. Third quarter revenue rose 3 percent from the year-ago-quarter and earnings per share fell by 4 cents. Analysts had expected Zynga to post earnings per share of 1 cent and revenue of $256 million.
This quarter’s net loss was due in part to a decrease in online game revenue. Zynga reported game revenue of $285.6 million in the third quarter, down 2.3 million from the year-ago-quarter. Furthermore, revenue bookings, or the actual value of virtual goods sold in Zynga’s games, fell 11% to $255.6 million and total expenses increased by 50 percent.
Znyga lowered its full-year forecast at the beginning of October after its new game,“Ville,” did not perform as well as expected. The company dropped expectations for bookings from $1.085 billion to $1.100 billion compared to its previous projection of $1.150 billion to $1.225.