UPDATE 2-Zynga's revenue rises, beats Street; shares climb

Gerry Shih

* Raises lower end of 2012 earnings outlook

* Shares jump 16 percent

SAN FRANCISCO, Oct 24 (Reuters) - Zynga Inc raised the lower end of its 2012 earnings outlook on Wednesday as the company reported a slight uptick in revenue that beat Wall Street's rock-bottom expectations.

Shares of Zynga jumped 16 percent to $2.47 in after-hours trade. The game publisher also announced a $200 million share buyback program and said it has begun a cost reduction plan expected to generate $15 million to $20 million in pretax savings.

The news was a bright spot after Zynga slashed its 2012 outlook earlier this month.

Quarterly revenue rose to $317 million, an increase of 3 percent from a year ago. The company revised its full-year adjusted earnings to between $152 million and $162 million, up from $147 million and $162 million.

The game maker, which has been fighting to reverse a dramatic exodus of players, had cut its 2012 earnings forecast on Oct. 4 when it warned investors its top line would be affected by poor performance in core money-making Internet games like ``CityVille''.

But challenges persist. Zynga recorded bookings of $256 million from July through September, the worst quarterly performance since late 2010 when the company was still enjoying a meteoric ascent toward its December, 2011 initial public offering.

Average daily bookings per average daily active user, a metric that roughly measures how much revenue the company squeezes out of each gamer, dropped sharply to $0.047, a decrease of 11 percent from a year prior.