Zynga Inc. expected results for the first quarter that fell shy of analysts’ estimates. The company said it expects to report revenue between $155 million and $165 million. Analysts are looking for $195.2 million. The casual-game maker of FarmVille is making moves to attract more users to its titles on smartphones and tablets. The San Francisco-based company said on Thursday mobile accounted for 60 percent of total bookings in the last quarter, higher as compared to 34 percent a year earlier. Excluding items, loss per share in the first quarter is expected to be 2 cents to 3 cents that misses the break-even predicted by analysts.
The stock is now down 58% over the past year as it fell about 16% to new low after the news.
Zynga, once the leader in games played on Facebook, posted a far bigger loss for the holiday quarter amid high spending in search of its next big hit. Shares of Zynga marked high in early 2012 after the launch of popular Web-based games tied to Facebook but they have been losing momentum since then as no more blockbusters were produced despite taking more steps in recent years to mobile games that are trending higher.
“In casual mobile gaming, you have to be a hits factory,” said Daniel Ernst, an analyst with Hudson Square. “Outside of the really big hit ‘Farmville,’ they’ve struggled to repeat that.”
Zynga is sitting on a plan to release between six and 10 new titles in 2015 as well as add two new categories, match-three puzzle and action-strategy games.
“The profit pools are very deep in those places, and we haven’t had participation in them,” said Clive Downie, chief operating officer.
One of the new action-strategy titles, “Dawn of Titans,” has been completed with the help of NaturalMotion, a studio based in the United Kingdom that Zynga bought last year in a cash and stocks deal valued at $527 million.
Mr. Downie said Zynga plans to keep putting money with an aim to increase its mobile presence in 2015. “We still have lots to do,” he said. “We’re not saying the transition is over.”
2014 was a transition year for Zynga as in that period the company made investments to achieve future growth, according to Chief Executive Don Mattrick.
Zynga lost $45.1 million or 5 cents a share in the three months ended Dec. 31, far greater than a loss of $25.2 million or 3 cents a share, in the same quarter last year. Excluding one-time items, it had a loss of less than a penny, down from the loss of 3 cents a share it faced a year ago and meet analysts’ estimates. Revenue for the quarter rose to $192.5 million compared with $176.4 million. Analysts had projected revenue of $201.1 million.
