Zynga Cuts Forecast, Stock Falls 40%

mark pincus woah zynga

Photo: Zynga

Zynga’s second quarter earnings are out!It looks like a huge miss. The stock is in absolute free fall, down more than 30 per cent. The stock was down more than 40 per cent at one point.

The social gaming giant was once one of the hottest IPOs of 2011, but has lost a lot of ground over the past several quarters. It relied predominantly on revenue from games played on Facebook, while games in general are now played on mobile devices.

A lightly-edited transcript of the call can be found below. But first, here’s the scorecard:

Zynga cut its forecast to a full-year EPS forecast of $0.09 to $0.04. Wall Street expected 2012 EPS of $0.27.

It lowered its outcome thanks to reduced expectations for Draw Something, a game it paid more than $200 million to acquire, and a faster-than-expected decline in existing web games.

Zynga posted EPS of $0.01 in the second quarter this year, compared to $0.06 EPS estimates from Wall Street.

It also missed on revenue in Q2 at $332.5 million, compared to consensus estimates of $344 million.

Another important metric, daily bookings per average daily player, fell from $0.051 to $0.046 year-over-year in the second quarter. Zynga’s players are essentially paying less to play Zynga’s games.

Zynga now has 33 million daily active users on mobile, CEO Mark Pincus said in a prepared statement with the earnings release.

It released a bunch of new games that have taken off, like The Ville and Bubble Safari, which both have more than 6 million daily players.

But there’s still no sign as to whether Zynga will begin to incorporate real-world gambling into its arsenal.

Zynga’s stock is down from a high of $14.69 this year.

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