Earnings peeks: Zynga and Amazon

• As Zynga is scheduled to report earnings after the markets close Thursday, key questions include the company’s growth and its relationship with Facebook.

Did the social-games maker grow, and what are its plans for continuing to do so? A FactSet analysts survey expects Zynga to have earned 5 cents a share on $316.8 million in revenue, which is almost 30 percent higher than sales in the same period a year ago, before the company was publicly traded.

What about its friendship with Facebook, the social network from which it derives most of its revenue? The report comes on the heels of a Facebook regulatory filing Monday that showed the San Francisco company accounted for 15 percent of Facebook first-quarter revenue, compared with 19 percent during all of 2011. Zynga, whose shares have been mostly lower for the past few weeks, fell sharply after the Facebook filing, continuing its stock-market roller-coaster ride.

Other contributors to the sell-off include a secondary offering, which the company announced last month. Also, some analysts cite last month’s purchase of OMGPOP, the “Draw Something” maker, as a factor. “People are now wondering if they are going to buy every mobile game company that has a hit,” Colin Sebastian of Robert W. Baird told MarketWatch.

Zynga shares, which started trading in December at $10, reached a high of $14.69 in March. They are trading at $9.29, up almost 2 percent, as of this post.

• Amazon.com, the world’s largest online retailer that also competes with many Silicon Valley technology companies, is also set to report earnings today.

What Wall Street and other interested parties are watching: the Seattle company’s spending. While one analysts survey expects Amazon to report $12.9 billion in first-quarter revenue, up 31 percent, profit is expected to have dropped to 7 cents a share compared with 44 cents a share in the year-ago period.

A couple of possible reasons: Amazon is probably selling its Kindle Fire tablet at or near a loss, with one analyst estimating that the company may lose $15 for each tablet sold. (It’s counting on Kindle users to drive sales of e-books and other goods it hawks on its website.)

The company also is expanding like crazy, with its hiring in the past two years reportedly outpacing that of Google and Microsoft. There’s also a report today that suggests Amazon is building a massive warehouse in Patterson, south of Modesto.

Amazon shares are off slightly to about $194.30 as of this post.


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