Zynga Earnings: Here’s Why Investors are Selling Shares Now

Zynga, Inc. (NASDAQ:ZNGA) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 8.63%.

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Zynga, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 83.33% to $0.01 in the quarter versus EPS of $0.06 in the year-earlier quarter.

Revenue: Decreased 17.87% to $263.6 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Zynga, Inc. reported adjusted EPS income of $0.01 per share. By that measure, the company beat the mean analyst estimate of $-0.04. It beat the average revenue estimate of $209.79 million.

Quoting Management: “We are encouraged by the strong execution from our teams and the breakout hit performance of FarmVille 2, which captures the imagination of nearly 40 million players every month,” said Mark Pincus, CEO and Founder, Zynga. “2013 will continue to be a transition year as we face the challenging environment on the web and invest in developing the leading franchises and network across web and mobile platforms and offer our 253 million monthly players a connected experience that can follow them from work to school to home and anywhere in between.”

Key Stats (on next page)…

Revenue decreased 15.29% from $311.17 million in the previous quarter. EPS were the same at $0.01 as the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.01 to a loss $0.01. For the current year, the average estimate has moved down from $0 to a loss of $0.05 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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