Zynga shares plummet after second-quarter earnings miss expectations
Social gaming company Zynga, purveyors of the many -Ville titles, have reported their second-quarter earnings and despite low expectations from analysts the company failed to attain the expected targets.
The company reported one cent earnings per share on revenues of $332 million, below the $344 million that the market was expecting. It also reported a net loss of $22.8 million for the quarter. As a result the company’s stock has sunk like a rock, falling over 40% in early after hours trading. Shares that were previous worth $10 apiece were hovering around the $3 mark.
What is worrying for Zynga is how reliant it is upon Facebook for revenue, which Facebook also relies on the social gaming company to some extent. Zynga CEO Mark Pincus has said of the poor performance:
We are lowering our outlook to reflect delays in launching new games, a faster decline in existing Web games due in part to a more challenging environment on the Facebook Web platform, and reduced expectations for Draw Something.”
Pincus has outlined some positive things that have occurred for the company, including reaching 300 million monthly users and 33 million daily mobile users.
“We are optimistic about our near-term prospects on Facebook, medium-term prospects on mobile, and long-term prospects with our network and platform.”