Zynga gets a boost as new games give investors hope

It might only be for one day, but for one day, at least, Zynga was able to give its investors some rewards for what could best be described as their long-tried patience.

The cause was Zygna’s stock price climbing as much as 11 percent Thursday, to $2.55 a share. OK, so one share of Zynga still costs roughly the amount of a McDonald’s Mini Bundle ($2.5 for either a double cheeseburger or a McChicken sandwich, plus a small order of fries), but for Zynga, Thursday was reason to celebrate.

Late Wednesday, Zynga reported a first-quarter loss of a penny a share on revenue of $187 million, which was better than Wall Street analysts forecasts for a loss of 2 cents a share on $162.2 million in sales. The Internet-based social gaming company also reported bookings of $182 million, which surpassed analysts’ estimates. Bookings are a big deal for companies like Zynga, as they are used as a barometer to measure future sales growth.

Zynga, which made its name via games such as “Farmville” and “Mafia Wars” played via a platform on Facebook, has been putting more of its emphasis on mobile games of late. The company said mobile bookings came to $139 million, or about 76 percent of its total bookings during the quarter. Zynga also said that for the first time, people are playing more of its games on Apple’s mobile devices than on Facebook.

Zynga’s results certainly give some breathing space to new Chief Executive Frank Gibeau, who replaced company founder Mark Pincus in early March. During the quarter, Zynga launched one of its most anticipated new titles “Willy Wonka and the Chocolate Factory Slots,” as well as games such as “Crazy Cake Swap” and “Vegas Diamond Slots.” The company also gave some insight into some of its upcoming titles, and said “CSR2” will launch early in the third quarter of the year, while “Dawn of Titans” will roll out during the end-of-the-year holiday season.

Michael Pachter, an analyst who follows Zynga for Wedbush Securities, said that new CEO Gibeau has a “history of getting games shipped on time and in a predictable manner.” Gibeau is a former executive at Electronic Arts and has been on Zynga’s board of directors for about a year.

“We are more confident that Zynga can hit its ten-game target for 2016, and we expect the pace of releases to pick up and become more consistent in future years,” Pachter said in a research report Thursday.

Photo: Zynga co-founder Mark Pincus walks off the stage after an announcement at the company’s San Francisco headquarters. (Associated Press)

 

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