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Question of the Day
NEW YORK (AP) - Online games company Zynga said its loss narrowed in the latest quarter even though revenue was largely unchanged as the company cut expenses by laying off workers, closing offices and shutting down older games.
The results exceeded Wall Street's muted expectations and Zynga Inc.'s battered shares increased 8 percent in after-hours trading after the release of the results. After a difficult 2012 in which Zynga saw its stock price decline by 75 percent, CEO Mark Pincus called 2013 a "pivotal transition year" for the company as it seeks to cut costs further and broaden revenue sources, especially from mobile games.
The San Francisco company behind "FarmVille" and "CityVille" lost $48.6 million, or 6 cents per share, in the October-December period. That compares with a loss of $435 million, or $1.22 per share, in the same period a year earlier. Zynga began trading publicly on Dec. 16, 2011, and was privately held for most of the 2011 quarter.
Zynga's revenue was largely unchanged at about $311 million. But it was well above analysts' average estimate of $250 million, as polled by FactSet.
For the current quarter, Zynga said it expects an adjusted loss of 5 cents to 4 cents per share and revenue of $255 million to $265 million. Analysts were predicting a loss of 1 cent per share and revenue of $268 million.
Zynga cut fourth-quarter expenses by two-thirds, to $274 million from $798 million, as demand for its games, which are played mainly on Facebook, has weakened. In October, the company announced that it was cutting about 5 percent of its full-time workforce of roughly 3,200 employees. It also killed 13 older games and closed development studios in Boston and elsewhere.
Shares climbed 22 cents, or 8 percent, to $2.96 in after-hours trading after gaining 18 cents to close at $2.74 during the regular session. Zynga's stock has traded from $2.09 to $15.91 in the past 52 weeks.
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