Zynga Plunges on Poor Q3 Outlook

Shares of online game company Zynga (NASDAQ: ZNGA) have plunged in Thursday's after-hours session after the company reported that it expects a much deeper loss for the third-quarter than Wall Street analysts had been predicting. At last check, ZNGA was down around 15 percent to $2.39. Facebook (NASDAQ: FB) shares are also seeing some activity on the news and were last down around 2 percent to $21.53. For the third-quarter, Zynga said that it expects a per share loss between $0.12 and $0.14 and adjusted results of breakeven per share to a loss of $0.01. Currently, analysts expect the company to breakeven in the quarter. Revenues are expected to be between $300 million to $305 million and bookings of $250 million to $255 million. Currently, analysts' are modeling revenues of $275.90 million for the third-quarter. The company said that the outlook reflects weakness in certain games and in its web "invest and express" category and an impairment charge of $85 million to $95 million related to an acquisition. The company lowered its full-year bookings outlook. It expects bookings of $1.085 billion to $1.100 billion. This compares to prior estimates of $1.15 billion to $1.225 billion. Zynga also lowered its EBITDA estimate to $147 million to $162 million versus prior guidance of $180 million to $250 million. Chief Executive Mark Pincus said, "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. 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."