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

Earnings calendar for the week of January 18

While the markets got a boost a couple of weeks ago after Congress passed the new stimulus bill, investors seem to have adopted a cautious stance as details of the

DAL Earnings: All you need to know about Delta Air Lines Q4 2020 earnings results

Delta Air Lines (NYSE: DAL) reported fourth quarter 2020 earnings results today. Operating revenues fell 65% year-over-year to $4 billion. The company reported a GAAP net loss of $755 million,

Aphria Inc. (APHA) reports Q2 2021 Earnings

Aphria Inc. (NYSE: APHA) reported second-quarter 2021 earnings results on Thursday. Revenues were C$160.5 million, an increase of 33% compared to the previous year. On an adjusted basis, the company reported earnings

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