Zynga Inc. (NASDAQ:ZNGA), the maker of social-networking games, surged to the highest in more than a year after recording a smaller-than-predicted loss in the third quarter as purchases of items used in games exceeded the company’s outlook.
Zynga soared 14 percent to $4.05, the highest price in more than a year, and was trading at $3.86, up 9.4 percent, at 1:39 p.m. in New York. The stock has rallied 63 percent this year, giving the company a market value of $3.1 billion.
Excluding one-time items, net loss for the three months ended Sept. 30 amounted to 2 cents a share, the San Francisco-based company said in a statement yesterday. Analysts had predicted a loss of 4 cents, according to Bloomberg.
Revenue slid to $202.6 million from $316.6 million a year ago, but beat analysts’ projections of $190.2 million. It was the lowest since the maker of “Farmville” went public in 2011 as more Facebook members played games from King.com, maker of "Candy Crush Saga."
Bookings, the value of virtual goods sold in the quarter, totaled $152 million in the third quarter, exceeding the company’s July 25 forecast of $125 million to $150 million. They were down 40 percent from a year earlier.
The company recently launched a free-to-play mobile game "CastleVille Legends" for Apple Inc's (AAPL.O) iOS devices to reinforce its foray into mobile gaming.
Total expenses fell 50 percent to $205.4 million.
Zynga said it cut 154 jobs during the quarter and reduced work with outside contractors to keep expenses in line with shrinking revenue.
Daily active users totaled 30 million, down from last year's 60 million. The figure was 39 million in the previous quarter.
For the fourth quarter, Zynga projects revenue of $175 million to $185 million, compared with analysts’ estimates of $186.3 million. The company sees a loss of 4 cents to 5 cents a share, excluding items, more than the 3-cent loss projected by analysts. Bookings, the value of virtual goods, are estimated at $130 million to $140 million, Zynga said.
Zynga also said it has named Clive Downie as chief operating officer, effective Nov. 4. Downie was recently chief executive of mobile social gaming service company DeNA Co.'s American and European division.