Zynga firms up mobile efforts, shares up 13 pct

Reuters

By Malathi Nayak

SAN FRANCISCO, Oct 24 (Reuters) - Zynga Inc said itexpects a full-year profit after reporting better-than-expectedthird-quarter results due to cost-cutting and a renewed focus onmobile games and core franchises like "Zynga Poker" that liftedshares 13 percent.

The creator of casual game "Farmville" said on Thursday itexpects to make a slim profit for 2013 before taking intoaccount exceptional items such as restructuring charges.

The game publisher, once among the hottest tech companieswith rapid revenue growth from popular Facebook-based games, wascaught flat-footed as the games industry saw a boom in mobilegames. It has since sought to regain its financial footing bytransitioning to smartphones and tablet titles, the increasinglypreferred format for casual gamers.

Longer term, investors however are keen to see Zynga lureusers back to its games. Daily active users had dropped to 30million in third quarter from 60 million in the same period ayear ago, the company said.

In July, Zynga recruited the former head of Microsoft Corp'sXbox business, Don Mattrick, to replace co-founder Mark Pincusas CEO. Mattrick has since been busy managing layoffs, trimmingcosts and reviewing the company's product pipeline.

The company recently launched a free-to-play mobile game"CastleVille Legends" for Apple Inc's iOS devices toreinforce its foray into mobile gaming.

Early signs looked promising, Mattrick said on an earningscall with analysts.

"We are getting good insights on monetization that we willbe able to leverage as we bring more of our intellectualproperty to mobile," he said.

On Thursday, Zynga said it hired Clive Downie, an executivewho managed the Western operations for Japanese mobile gaminggiant DeNA Co Ltd to be its new chief operatingofficer, further bolstering its in-house mobile expertise.

Shares in Zynga were up at $3.99 in after-hours tradingafter closing at $3.535 on the Nasdaq on Thursday.

Zynga's non-GAAP revenue fell to $152.1 million from $256million for the same period a year ago, but surpassed analysts'average estimate of $142.7 million, according to Thomson ReutersI/B/E/S.

It reported a loss of $16.2 million compared with a loss of$361,000 for the same period last year. It reported a net lossper share of 2 cents, while Wall Street expected a 4-cent loss,according to Thomson Reuters I/B/E/S.

The company forecast fourth-quarter revenue in the range of$175 million to $185 million.

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