Zynga Swings to a Profit

Zynga Inc. swung to a profit in its third quarter and posted an 11% increase in revenue, but the game developer offered a soft outlook for the holiday quarter.

Zynga also unveiled a $200 million share-buyback program and announced that Chief Financial Officer David Lee has resigned and will leave the company in December.

Accounting Chief Michelle Quejado will take Mr. Lee's place in the interim while the company conducts a search for a permanent replacement.

For the period ended Sept. 30, Zynga swung to a profit of $3.05 million in the period ended Sept. 30, compared with a loss of $57.1 million a year earlier. Profit was helped by a 13% reduction in expenses from the prior year.

Per-share earnings were flat, while analysts had forecast a loss of a penny a share, according to Thomson Reuters.

Zynga is still trying to find the kind of success with mobile apps that it once had on PCs, particularly in games played through Facebook. It continues to struggle with a decline in customers.

In the third quarter, the number of people playing its games daily fell 21% to about 19 million from a year ago, while monthly active users tumbled 27% to about 75 million.

Revenue in the quarter rose 11% to $195.7 million. Zynga said it saw strength in its slot-machine, poker and Words With Friends games.

Bookings, a measure of revenue closely watched by analysts, were essentially flat at $176 million, but topped the company's guidance for $155 million to $170 million in bookings.

For the fourth quarter, Zynga forecast bookings of $165 million to $180 million, below the $191.8 million analysts had forecast. Zynga said it expects an adjusted per-share loss of a penny to flat earnings. Analysts forecast flat earnings.

Zynga said it would delay the release of two games that had been scheduled for the quarter. The games, Dawn of Titans and CSR2, will now be released in 2016.

Write to Chelsey Dulaney at [e-mail]

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(END) Dow Jones Newswires

November 03, 2015 16:55 ET (21:55 GMT)

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