Gaming company Zynga has just released preliminary financial results for the third quarter of 2012, lowering its outlook for the year. The company expects to report full Q3 results October 24.
Zynga expects to report revenue in the range of $300 million to $305 million and bookings in the range of $250 million to $255 million for the third quarter. The company also says it will report a net loss of between $90 million and $105 million, non-GAAP net loss between $2 million and $5 million and adjusted EBITDA between $10 million and $15 million for the third quarter.
In addition, Zynga expects to report diluted EPS between ($0.12) and ($0.14) and non-GAAP EPS between $0.00 and ($0.01) for the third quarter.
This is more bad news for Zynga, which missed earnings in Q2. At the time, Zynga lowered its outlook. And a few months later, Zynga is cutting its outlook once again. For basis of comparison, Zynga reported Q3 2011 revenue (when it was a private company still) of $306.8 million for the quarter, which was up 80 percent from Q3 2010. Net income was $12.5 million, down 50 percent from the third quarter 2010 ($27.2 million).
These losses are attributed to certain games in the company’s web “invest and express” category, and also includes an estimated impairment charge between $85 million and $95 million (excluding any income tax impact) related to the intangible assets previously acquired in connection with the company’s purchase of OMGPOP.
“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 Mark Pincus, CEO and Founder of Zynga in a release.
“We’re addressing these near-term challenges by implementing targeted cost reductions in the fourth quarter and rationalizing our product R&D pipeline to reflect our strategic priorities. At the same time, we are continuing to invest in our mobile business where we have one of the strongest positions in the industry. These actions support our strategy to transition from being a first party web game developer to a multiplatform game network. We remain 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. FarmVille2 has been our most successful launch since CastleVille in terms of daily bookings, and we now offer 3 of the top 5 most popular mobile games in the U.S. in terms of time spent according to Nielsen.”
Zynga is also lowering its outlook for full year 2012 to reflect preliminary third quarter results and revised expectations for the remainder of 2012. The change in outlook is primarily due to reduced expectations for certain web games including The Ville, and delays in launching several new games.
The company’s updated outlook for full year 2012 includes: Bookings projected to be in the range of $1.085 billion to $1.1 billion (compared to previous expectations of between $1.150 billion to $1.225 billion). Adjusted EBITDA projected to be in the range of $147 million to $162 million (compared to previous expectations of between $180 million to $250 million).
This dismal news adds to the reports of a mass exodus from the company, as well as a steadily declining stock price. The company’s stock closed today at $2.82.