Zynga Beats Earnings Expectations
On Thursday, after the close of trading, Zynga Inc. (ZNGA, -2.39%) reported second quarter earnings. The social video game provider beat analyst expectations for earnings and for revenue however, its user numbers were on the downside. As a result, the shares of Zynga declined by almost 1% in extended trading. According to Zynga, year over year, their daily active user numbers have declined to 21 million, down 23%. Quarter over quarter, their user numbers were down 15%. In addition, the company’s monthly active users in the 2nd quarter also declined to 83 million, down 32% compared to 100 million monthly active users reported in the first quarter. Zynga also reported revenue of $199.9 million, an increase of 30% year over year, as well as a loss of 1 cent per share. This beat analysts’ expectations of a loss of 2 cents per share on revenue of $153.2 million for the second quarter. Zynga also stated that for the third quarter, they are projecting to be in the range of $175 million to $190 million while analysts have forecast $174.8 million in revenue for the same quarter. Also on the upside was Zynga’s advertising business which rose 70% from the same quarter last year to $38 million. This was up 7% quarter-over-quarter. Since their last earnings report, Zynga’s stock has declined by more than 12% and on Thursday, the stock price declined another 2%. During the extended trading session, the gaming company’s stock price continued to decline an additional 1% after their earnings report was released to trade at $2.45 a share.
On Thursday, U.S. stocks traded lower. This came after a volatile trading session where technical levels were tested as media stocks suffered a big hit. Investors have now shifted their attention to the closely watched jobs report which is due out on Friday morning. At the close of trading, the Nasdaq Composite Index (COMP) dropped 1.6%, or 83.50 points, to close at 5,056.44. This came after the tech heavy index was down by 105 points earlier in the trading session. Interestingly, the Nasdaq also declined below its 50-day moving average, which is a key support level watched by technical traders. This decline could therefore suggest that we could see more of a downhill trend for the index. Also on the downside was the Dow Jones Industrial Average (DJIA) which declined 0.7%, or 120.72 points, to 17,419.75. This marked the blue chip index’s 6th straight day of losses which is also its longest losing streak since October last year. Meanwhile, the S&P 500 index (SPX) declined 0.8%, or 16.28 points, to 2,083.56, after dropping more than 24 points during the session. Losses were led by the health care sector, down 2.1% while the consumer discretionary and the tech sectors were down 1.3% and 1% respectively. Also, during the session, the SPX nearly fell below its 200-day moving average of 2,072.56.
On Thursday, the U.S. dollar trimmed gains. Earlier in the trading session, the greenback strengthened after the Department of Labor in the U.S. said that the number of people filing for initial jobless benefits in the week ending on the 1st of August rose to 270,000, up 3,000. The previous week’s total was at 267,000 while analysts had forecast initial jobless claims to rise to 273,000 last week, up 6,000. This came as investors now turn their attention to the nonfarm payroll data which is due out today. This data will provide further indications regarding a possible rate hike by the Federal Reserve in September this year. The EUR/USD traded at 1.0915, up 0.11% while the GBP/USD traded at 1.5515, down 0.56%. Meanwhile, the U.S. dollar traded higher against the Australian dollar with AUD/USD down 0.14% to 0.7346, while the greenback also traded higher against the Swiss franc with USD/CHF up 0.26% at 0.9816. The U.S. dollar index remained steady at 97.97.
U.S. crude futures continued to decline on Thursday, remaining near six-month lows. This came in response to concerns by investors regarding the global supply glut after fresh supply data was released this week. During the trading session, WTI crude oil for September delivery traded between $44.20 and $45.27 a barrel. The contract settled at $44.70 a barrel, down 1.01%, or $0.45, on the New York Mercantile Exchange. Over the last month of trading, WTI crude has declined by more than 21%. Meanwhile, on the Intercontinental Exchange (ICE) in London, Brent crude oil for delivery in September traded at $49.60 a barrel, up 0.02%, or $0.01. This marked the 4th straight day that Brent remained under $50 a barrel.