Zynga shares drop 10%, despite beating expectations

Social gaming company had revenue of $264 million for the quarter, $0.01 earnings per share

Shares of Zynga dropped more than 10% in after-hours trading, despite posting better-than-expected first-quarter results after the close Wednesday.

Zynga is now trading at $3.00 a share, after gaining 5.31% to $3.35 a share in regular trading.

The company's quarterly results were a mixed bag. While Zynga beat Wall Street expectations, its revenue and bookings were down year-to-year, as were both daily and monthly active users.

Zynga reported GAAP revenue of $264 million, down 18% from $320 million at the same time last year. Bookings were $230 million, down 30% from $329 million in Q1 2012. The company also reported non-GAAP earning per share came of $0.01.

The company experienced a net income of $4 million for the quarter, compared to a loss of $85 million in the first quarter last year. 

Analysts had been expecting to see a loss of 4 cents per share on revenue of $209 million. In its fourth quarter earnings report, Zynga had projected revenue in the range of $255 to $265 for the first quarter of 2013, with a net loss in the range of $32 million to $12 million. Bookings were projected to be between $200 and $210 million.

Zynga's daily active users decreased 21% year-to-year, from 65 million to 52 million. DAUs were down 8% from 56 million in the fourth quarter of 2012.

Monthly active users were down 13% year-to-year, from 291 million to 253 million. MAUs were down 15% quarter-to quarter, from 298 million in Q4 2012.

Zynga is expecting for revenue in the range of $225 million to $235 million for Q2 2013. It is expecting a net loss is in the range of $36.5 million to $26.5 million, while non-GAAP EPS is projected to be in the range of ($0.04) to ($0.03), based on a share count of approximately 785 million to 795 million shares.

"We are encouraged by the strong execution from our teams and the breakout hit performance of FarmVille 2, which captures the imagination of nearly 40 million players every month," Mark Pincus, CEO and Founder of Zynga, said in a statement. "2013 will continue to be a transition year as we face the challenging environment on the web and invest in developing the leading franchises and network across web and mobile platforms and offer our 253 million monthly players a connected experience that can follow them from work to school to home and anywhere in between."

This is the third quarter in a row that Zynga came out ahead of Wall Street expectations.

In its Q3 2012 results, Zynga reported revenue of $317, with earnings per share at 0 cents, Analysts had been expecting a loss of 1 cent per share on revenue of $256.4 million for the quarter.

In the fourth quarter of 2012, Zynga reported GAAP revenue of $311 million, flat year-over-year, with bookings of $261 million, down 15% year-to-year. Earnings per share came in down 6 cents, while adjusted earnings per share was a penny. Analysts had been expecting to see a loss of 3 cents per share on revenue of $212 million.

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