Zynga and Outerwall Plunge on Quarterly Results and 3 More Hot Stocks
Zynga (NASDAQ:ZNGA): Beats on both earnings per share (-1 cent, beat by 3 cents) and revenue ($188 million, beating by $2.5 million) can’t help the 15 percent plunge in Zynga’s shares. The company announced it won’t pursue real money gaming in the U.S. and analysts are clearly dismayed, as the decision removes a fair amount of upside for the shares, according to Needham. But Wedbush comes to Zynga’s aid, as a review by CEO Don Mattrick “will result in a further streamlining of operations [and] will help the company to better focus on its more immediate revenue opportunities.”
Outerwall Inc. (NASDAQ:OUTR): A fairly substantial EPS beat ($1.91, beating by 92 cents) isn’t enough to salvage the shares from a revenue shortfall ($554.2 million, short $10.02 million), as the stock is now down 12 percent. The company suffered from a lack of demand for DVD rentals, but is looking to grow as a 35 percent stake holder in Redbox Instant and through a new venture to sell fresh-brewed coffee at kiosks.
Dunkin’ Donuts (NASDAQ:DNKN): Dunkin’ Donuts has plans for 46 new stores to open in California by 2015 as part of its mission to open 1,000 stores in the state. As of now, about 85 percent of the chain’s 7,300 domestic stores are still in or around the Northeast, as efforts to penetrate Western markets didn’t go so smoothly.
Disney (NYSE:DIS): Needham estimated that if an a la carte system was adopted throughout the cable and satellite industry, Disney’s ESPN programming could cost users about $30 per month. The popular sports network is holding the pay-TV model together, and consumers would get slammed with higher fees and less choices if a la carte became a reality, according to industry executives.
PepsiCo Inc. (NYSE:PEP): Pepsi is going head to head with Coca-Cola Co. (NYSE:KO) in the premium bottled water market with a new product called Om, which is intended to swipe market share away from Coca-Cola’s Smartwater, Evian, and Fiji, as sales during the first half of the year remained strong. Separately, Pepsi is dropping the “all natural” line from its Naked line of juices and will pay out $9 million in a related lawsuit.