Zynga, maker of 'FarmVille,' expects 3Q loss
Zynga expects net loss of 12 to 14 cents a share, after taking a charge of $85 million or more on its purchase of flailing OMGPop. Zynga shares lose 18 percent in after-hours trading.
Zynga¬†Inc., the maker "FarmVille" and other online games, expects a loss for the third quarter due to weak demand for some of its titles. It's also taking a charge related to its acquisition of OMGPop, a mobile game maker, which it bought for $183 million in March.
The San Francisco-based game company said Thursday that it sees a net loss of 12 to 14 cents per share for the three months that ended on Sept. 30. Excluding one-time items the company expects to break even or post a loss of 1 cent per share.
Zynga¬†also forecast revenue of $300 million to $305 million.
Analysts, on average, expect breakeven earnings on revenue of $286.7 million, according to FactSet.
Zynga¬†said will take a charge of $85 million to $95 million on its acquisition of OMGPop, the company behind "Draw Something." The charge ‚ÄĒ which amounts to roughly half of what¬†Zynga¬†paid for the company, represents its diminishing value. While user numbers soared earlier this year, "Draw Something" quickly lost footing in the months following the acquisition.
Zynga¬†also cut its guidance for the full year. It expects bookings of nearly $1.09 billion to $1.1 billion, down from earlier expectations of between $1.15 billion to $1.23 billion. Bookings reflect in-game purchases of virtual goods in the quarter they occur.
"The third quarter of 2012 continued to be challenging and, while many of our games performed to plan, as a whole we did not execute to our satisfaction," said CEO Mark Pincus in a statement.
He added that the company remains "optimistic about the opportunity for social gaming and the power of our player network of 311 million monthly active users. When we offer our players highly engaging content, they respond."
Investors were not as optimistic.¬†Zynga¬†shares tumbled 51 cents, or 18 percent, to $2.31 in after-hours trading.