Zynga (remember them?) gets a boost as bookings get better

Hey, do you remember Zynga? Scratch your head. Put your thinking cap on.

There, of course you do. A few years back, you probably spent countless hours at work playing Zynga games such as “Farmville” and “Mafia Wars.” And then your boss caught you. And then people discovered they could play games on their smartphones instead of what was Zynga’s bedrock slate of desktop games played via Facebook. And then everything went downhill for Zynga.

Founder and Chief Executive Mark Pincus stepped down from his CEO job. Then came back. Then stepped down again. At its highest point, Zynga’s stock price reached $15.91… in March 2012. Since then, the company has struggled as it has adjusted to the changes in how people play games.

Friday, Zynga’s stock was still only at $3.05 a share. But that price represented a 6 percent gain from the day before, and for San Francisco-based Zynga, any victory is a good victory.

What gave Zynga a boost was how investors thought about the company’s future. Late Thursday, Zynga said it expects its second-quarter bookings to be $205 million, which topped analysts’ forecasts of $195.5 million. During the same period a year ago, Zynga had bookings of $175 million. For Zynga, bookings are a big deal, as growth in bookings shows customers are committing themselves to spending more money on Zynga’s games.

It also helps that Zynga has a pretty good first quarter. Excluding one-time items, the company earned less than a penny a share, on revenue of $194.3 million. That may not seem like much of a win, but analysts had forecast Zynga to lose 2 cents a shares on $192.6 million in sales. Mobile bookings rose 27 percent from a year ago, to $162 million, and revenue from mobile sources climbed 19 percent, to $176 million.

Analysts said there can be no doubt that if Zynga wants to remain a viable gaming company, its future is going to remain with going mobile.

“We see a long tailwind for mobile growth and expect the integration of games like “Words with Friends” with messaging platforms to help fuel that growth,” said Mizuho Securities analyst San Phan, in a research note.

Zynga still has a long way to go to regain the cachet it once had, but staying mobile may just have it on the right path.

Photo: The logo of San Francisco-based gaming company Zynga. On Friday, Zynga shares rose 6 percent due to an upbeat quarterly report and bookings outlook. (Bay Area News Group archives)

 

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