CSR2 mobile racing game helps Zynga hit $197 million in bookings for third quarter

On the strength of new games like CSR2 and FarmVille: Tropic Escape, Zynga reported third fiscal quarter earnings that beat Wall Streets estimates for the three months ended September 30.

Based on new financial reporting rules, it might look like Zynga actually missed its targets. Analysts expected Zynga to report earnings per share of 1 cent a share on bookings of $187 million. On a GAAP basis, Zynga reported a loss of 5 cents a share and bookings of $182 million. But the analyst estimates are based on non-GAAP numbers, which remove one-time anomalies from the results. On that basis, Zynga reported a slight profit on bookings of $197 million.

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“The quarter was a good one,” said Frank Gibeau, CEO of Zynga, in an interview with GamesBeat. “We executed well. And we gained some momentum in our turnaround.”

In early after-hours trading, Zynga’s stock price fell 3.2 percent to $2.65 a share. Zynga’s value is about $2.3 billion, far below its $9 billion value in 2011 after its initial public offering.

During the quarter, Zynga launched CSR2, the sequel to its successful racing game, during the quarter. The game is No. 1 in top-grossing in 50 countries.

“We were a little worried when we released it in the same week as Pokemon Go, but it is performing extremely well in the face of crazy competition,” Gibeau said.

Zynga also launched FarmVille: Tropic Escape in the quarter, and the results also included a full quarter of Wizard of Oz: Magic Match, a social casino game. All of those helped boost earnings before income taxes, depreciation, and amortization (EBITDA, a measure of profitability) during the quarter.

Gibeau said the company is working hard on Dawn of Titans, a new real-time strategy game coming from the company’s U.K. studio. It’s in soft launch and will likely release before the end of the year. Since it’s launching late in the quarter, it shouldn’t big impact on fourth quarter bookings, which Zynga expects to be about $185 million to $195 million.

Meanwhile, during the third quarter, Zynga’s key mobile games – Words With Friends, Zynga Poker and Slots – continued to drive growth with bookings up 26 percent from a year ago.

“We are executing in delivering high-quality games, growing our existing franchises, and reducing operating expenses,” Gibeau said.

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Zynga also announced today it will buy back shares in a $200 million program that will be executed over two years. During the quarter, the mobile game maker hired its new chief financial officer, Gerard Griffin, from a finance job at Electronic Arts. Gibeau said he was pleased with the work that the newly recruited management team has done, but he added, “Our work isn’t done.”

For live mobile, Words With Friends saw good growth in the quarter with bookings up 33 percent from a year ago and 7 percent sequentially. Zynga introduced the game on iMessage as a new experiment. Social slots grew mobile bookings 26 percent from a year ago.