SAN FRANCISCO (CBS/AP) – Online games company Zynga reported a net loss in the first quarter because of stock-compensation expenses, but adjusted earnings were better than Wall Street expected.
Zynga Inc. said Thursday that net loss was $85.4 million, or 12 cents per share, in the January-March period. It had earnings of $16.8 million a year earlier when it was still a private company. Zynga went public in December.
The company’s adjusted earnings of 6 cents per share beat Wall Street’s expectations by a penny. This figure excludes one-time items such as nearly $134 million in stock-compensation expenses.
Revenue grew 32 percent to $321 million from $243 million. Analysts, on average, were expecting revenue of $318 million, according to a survey by FactSet.
Zynga’s games include “CityVille” and “Words With Friends.” It recently bought OMGPop, the maker of the mobile game “Draw Something.” This helped boost the number of monthly active users to 292 million, from 236 million a year earlier.
Though its mobile games are popular, Zynga relies on Facebook for the bulk of its revenue. That’s not necessarily a bad thing. Its dependence on Facebook explains how Zynga got big in the first place. As it grows, though, Zynga may need to diversify its revenue sources so it’s not overly dependent on the world’s largest online social network. Facebook takes a 30-cent cut out of every dollar that people spend on Zynga’s games.
For all of 2012, Zynga expects adjusted earnings of between 23 cents and 29 cents per share. Analysts were forecasting 27 cents.
The San Francisco-based company’s stock fell 32 cents, or 3.4 percent, to $9.10 in after-hours trading after initially trading higher. The stock had closed up 31 cents, also 3.4 percent, at $9.42.
Zynga’s stock priced at $10 when the company went public and has traded from $7.97 to $15.91 since. Recently, though, investors have been punishing the stock due to worries about the company’s ability to maintain fast growth.
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