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Zynga Earnings Top Estimates After Punishing Day for Video Games

Zynga Earnings Top Estimates After Punishing Day for Video Games

(Bloomberg) -- Zynga Inc. brought a bit of good news to the battered gaming industry on Wednesday, with its latest results beating Wall Street estimates.

  • Adjusted earnings before interest, taxes, depreciation and amortization -- a closely watched measure of profit -- amounted to $56 million last quarter, topping the $50.5 million projected by analysts. Revenue also exceeded predictions.

Key Insights

  • The results support claims by Chief Executive Officer Frank Gibeau that he has turned around the social-gaming company after years of struggles.
  • The first-quarter forecast was a mixed bag, with earnings projected to be higher than expected but sales falling short. San Francisco-based Zynga said that accounting rules explained the revenue shortfall.
  • After early hits such as FarmVille and Zynga Poker peaked, the company has fought to win back territory on users’ devices. Merge Dragons and Empires & Puzzles have been recent successes for Zynga.

Market Reaction

  • The shares climbed as much as 7.1 percent to $4.83 in extended trading after the results were released. They’re up 15 percent this year through the close.

Get More

To see Zynga’s release, click here.

To contact the reporter on this story: Nick Turner in Los Angeles at nturner7@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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