Zynga Earnings Beat but Outlook Disappoints

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Zynga reported a drastic decline in the number of people playing its online games in the first quarter, sending shares down sharply in after-hours trading, even though earnings and revenue topped market expectations.

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Monthly active users skidded 13 percent to 253 million—the lowest figure since the number peaked at 331 million at the end of the third quarter of 2012.

The company has struggled to keep users, who once flocked to its games on Facebook's website. In recent months, Zynga and Facebook have revised their business partnership, as Zynga has sought to establish itself as a more independent gaming network.

Net income for the quarter was $4.1 million, reversing last year's loss of $85.4 million. Excluding items, Zynga earned $9.1 million, or 1 cent a share, down from $47 million, or 6 cents a share, in the year-earlier period.

Zynga's revenue fell 30 percent to $230 million from $329 million a year ago.

Analysts expected the creator of online games like "FarmVille" and "Words With Friends" to report a loss of 3 cents per share on sales of $210 million, according to a consensus estimate from Thomson Reuters.

For the second quarter, the company projected bookings of $180 million to $190 million vs. estimates of $232 million, and a loss of 3 cents to 4 cents a share vs. estimates of a 1-cent loss.

"2013 will continue to be a transition year as we face the challenging environment on the web and invest in developing the leading franchises and network across web and mobile platforms and offer our 253 million monthly players a connected experience that can follow them from work to school to home and anywhere in between," said CEO and Founder of Zynga Mark Pincus in a statement.

Reuters contributed to this report.