Zynga Delivers A Tad Ahead... Is It Good Enough? (ZNGA)

Media

Published: April 26, 2012 4:21 pm

Last Updated: April 28, 2020 10:54 am

Zynga, Inc. (NASDAQ: ZNGA) has reported its first corporate earnings report since coming public this year. The social gaming company has reported earnings of $0.06 EPS and $329 million in revenue. Thomson Reuters had estimates of $0.05 EPS on $317.25 million in revenue. On a GAAP basis including the IPO costs Zynga would have lost on earnings at -$0.12 EPS.

The guidance for 2012 is as follows: Bookings are projected to be in the range of $1.425 billion to $1.5 billion, with most growth weighted in the second half. Full year 2012 non-GAAP EPS of $0.23 to $0.29. Thomson Reuters has revenue projections of $1.42 billion and non-GAAP earnings of $0.27 EPS.

The company talked up its record bookings at $329 million for a 15% gain. New game development drove down its EBITDA by 23% to $87 million on an adjusted basis. Daily active users have risen from 62 million in the first quarter of 2011 to 65 million in the first quarter of 2012, for a gain of 6%. Monthly active users have risen from 236 million in the first quarter of 2011 up to 292 million in the first quarter of 2012, for a gain of 24%.

We were not sure how Zynga would offer up guidance, but here is what the company offered up as additional 2012 outlook figures beyond the above guidance:

Adjusted EBITDA of $400 million to $450 million.
Cap-ex of $390 million to $410 million, including its headquarters purchase.
Effective non-GAAP tax rate of 25% to 30%.
Non-GAAP weighted-average diluted shares outstanding of about 880 million shares in the fourth quarter of 2012.

Zynga closed up 3.4% at $9.42 and the stock is up 1.6% at $9.57 in the after-hours session reaction. Zynga is still trading as a busted IPO in the classic sense of the term. Today’s numbers are not exactly blowout figures and the guidance seems mostly in-line with estimates for the year. We also have a hard time trusting that the increases will be back-end loaded considering that the company has no history to refer back to as a trust factor.

This may be good enough for some investors but this is not a screaming buy as far as we can see without hearing the conference call as of yet.

JON C. OGG

Are You Ahead, or Behind on Retirement? (sponsor)

If you’re one of the over 4 Million Americans set to retire this year, you may want to pay attention.

Finding a financial advisor who puts your interest first can be the difference between a rich retirement and barely getting by, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors that serve your area in minutes. Each advisor has been carefully vetted, and must act in your best interests. Start your search now.

Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.