Zynga Inc. shares shot more than 7% higher in after-hours trading Wednesday despite an earnings miss, as the company reported strong bookings and increased its revenue expectations for the year. Zynga reported a first-quarter loss of $128.8 million, or 14 cents a share, on sales of $265.4 million, up from $208.2 million in the same quarter a year ago. The videogame company reported bookings, which represents agreements for future business, of $359 million, up substantially from $162 million a year ago. After adjustments for stock-based compensation and other effects, Zynga claimed a loss of 7 cents a share, down from adjusted earnings of 3 cents a share a year ago. Analysts on average expected Zynga to report adjusted earnings of 5 cents a share on sales of $328 million, according to FactSet. Zynga added $50 million to its annual revenue forecast, making it $1.2 billion, and $100 million to its bookings guidance, making it $1.45 billion. In a letter to investors, the company blamed the quarterly losses on an increase in deferred revenue, which will be recognized later. Zynga shares closed at a five-year high of $5.66 Tuesday, but fell 2.7% Wednesday ahead of the earnings report. The stock has gained 57.2% in the past year, as the S&P 500 index has gained 11%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
