Categories Earnings, Leisure & Entertainment

Earnings preview: Factors likely to influence Zynga’s (ZNGA) Q4 results

Zynga Inc. (NASDAQ: ZNGA), the maker of popular social media game Farmville, has been on the revival path for quite some time, especially after new CEO Frank Gibeau took charge a few years ago. The company revised up its full-year guidance in each of the last three quarters, in a sign that the recovery is gaining steam.

Zynga (ZNGA) mobile performance trend

When the mobile game maker reports fourth-quarter results on Wednesday after the closing bell, the market will be looking for earnings of $0.06 per share, which represents a 20% year-over-year increase. Revenues are seen growing 57% annually to $418.56 million.

Strong Booking

The company’s popular franchises, mainly Poker, Words with Friends-2 and CSR Racing-2, continue to support revenue generation. The upcoming results should also reflect early contributions from the recently launched Merge Magic!. The upbeat outlook also reflects revenues from the new Live services, which allow users to purchases virtual goods featured in the games.

Another strong booking growth in on the cards this time, reflecting the high level of user engagement. That should offset the impact of an estimated weakness in monthly active users and daily active users. The other headwinds are the diminishing popularity of the company’s older franchises and online games, in addition to the continuing strain on margins due to high operating expenses.

Mobile Segment Shines

In the third quarter, Mobile services, Zynga’s core segment that accounts for about 90% of total sales, continued the strong performance, with a marked increase in bookings that drove up revenues by 48% to $345 million. However, the top-line missed the estimates. Since its recent launch, Game of Thrones Slots Casino became the fastest growing Slots title in the first full quarter.

Peer Performance

Last week Electronic Arts (EA) reported double-digit increase in third-quarter earnings and revenues, with all the key business segments registering growth. Though the results fell short of expectations, the company issued guidance above the consensus estimates.

Also see: Zynga Q3 2019 Earnings Conference Call Transcript

Zynga’s shares have stayed low for several years after retreating from its post-IPO peak long back. The trend changed for the better last year when the shares regained momentum and grew about 24%.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top