Ahead of the Bell: Zynga
NEW YORK -- Shares of Zynga tumbled in premarket trading on Friday as the online game maker said that it expects a third-quarter loss due to weak demand for some of its titles.
The San Francisco company also said late Thursday that it is taking a charge related to its acquisition of OMGPop, a mobile game maker, which it bought for $183 million in March.
Zynga Inc. anticipates a third-quarter loss of 12 to 14 cents per share. Excluding one-time items, the company expects to break even or post a loss of 1 cent per share. It forecast revenue of $300 million to $305 million.
Analysts polled by FactSet expect breakeven earnings on revenue of $286.7 million.
The company's stock fell 55 cents, or 19.4 percent, to $2.27 before the market open. That would be well below its 52-week low of $2.66 set in early August if the price carries over into regular trading.
Brian Pitz of Jefferies lowered Zynga's price target to $2.50 from $3 and maintained a "Hold" rating. In a client note, the analyst said that he expects the company to give more specifics about cost cuts when it hosts a conference call on Oct. 24 to discuss its quarterly results.
Pitz says Zynga is also continuing its shift away from being a first-party web game developer and investing more in mobile efforts so that it can serve as a multiplatform game network.