A Need to Know Basis: Zynga Earnings

IE

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Zynga reports earnings after the bell. Here are the important numbers and angles you need to keep in mind. All data courtesy of Thomson Reuters.


Zynga:

Earnings: Street consensus is for earnings of 5 cents a share on revenue of $344 million.

Keep in Mind: Zynga shares have been beaten down lately amid concerns about weakening active user trends, as well as the company?s reliance on Facebook?s platform.

The maker of casual games such as ?CityVille? and ?Words With Friends? has built most of its success through ties to Facebook. But recently it has taken steps to expand beyond that social network. Last month, it laid out plans to offer a central hub for players of online games, dubbed ?Zynga With Friends.? The new offering is intended to connect players of multiple game titles on different websites or mobile devices.

Shares recently dropped 0.5% to $4.89. The stock is down 48% this year. Zynga priced its initial public offering at $10 in December. The stock peaked in early March at nearly $16, but since then has dropped nearly 70%.

?Expectations going into Q2 are VERY low,? says Mark Mahaney, an analyst at Citigroup.

Earlier this year Zynga said it paid about $180 million in cash to acquire OMGPOP, maker of the popular mobile-phone game ?Draw Something.?

It has also launched its own website, zynga.com, as a way to lessen its reliance on Facebook, which is suffering from its own issues. Facebook?s first earnings report as a public company is scheduled for Thursday after the closing bell.

For earnings, investors will keep a close eye on any slowdown in active users as well as if it has lessened its ties to Facebook.

Below is an earnings ?cheat sheet? that Citi?s Mahaney has created to give an investors a roadmap of what to expect from Zynga?s report.

OB-TX107_zynga0_H_20120725153357.jpg
 

selkirk

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Jul 16, 1999
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had a small short on zynga that I covered far too early, and same for Groupon, which posted in the forum, covered that way to early (larger posistion on Groupon)

these two companies might be better in the future but they will have to change a great deal, groupon, will have to offer almost all products, and Zynga will have to have every small game, even then hard to see how zynga grows quickly.

thanks
selkirk
 
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