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Zynga Shares Rise 7% on Strong Forecast

May 04, 2017

Zynga, creator of online game FarmVille, forecast an increase in current-quarter bookings above estimates on Thursday, helped by the strong performance of its titles such as Zynga Poker and Words with Friends.

The company forecast bookings of $205 million in the second quarter, which ends June 30, beating the $195.5 million expected by analysts polled by financial data and analytics firm FactSet StreetAccount. Zynga posted bookings of $175 million for the same period a year earlier.

Bookings, an important metric indicating future revenue, include the sales of virtual goods such as currency and lives.

Zynga's shares rose 7% in after hours trading on Wednesday to $3.03.

Zynga, once one of Silicon Valley's fastest-growing companies, suffered a dramatic reversal of fortunes in 2012 as gamers switched from the company's Facebook-based desktop games to those played on mobile devices.

"From our perspective, we're very encouraged by the results, (but) we're not declaring victory by any means," CEO Frank Gibeau said in an interview on Thursday.

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The company said in February, it paid $42.5 million for four Solitaire smartphone games created by Harpan. Zynga released "Boggle with Friends" late in the quarter.

Zynga (znga) is also expected to benefit from Facebook Inc's launch of instant games on its Messenger app, where "Words with Friends" is one of the biggest titles available.

The company reported a 14.2% rise in bookings to $207.4 million in the first quarter ended March 31, beating analysts' average estimate of $189.9 million, according to FactSet.

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Net loss narrowed to $9.5 million, or 1 cent per share, from $26.6 million, or 3 cents per share, a year earlier.

The company forecast another net loss of 1 cent per share for the current quarter.

Zynga CEO Gibeau said he expects the company to be profitable very soon and then grow from there.

The company said mobile revenue rose 19% to $161.6 million, the highest in the company's history.

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