The online game company, Zynga said late Tuesday that it narrowed its losses for the fourth quarter, even though revenue remained flat. The company was able to reduce its loss from the same period a year ago because it closed offices, cut jobs and shut down games that were not performing up to par.
The results by the company for the fourth quarter beat expectations that analysts on Wall Street had predicted. Shares of the company’s stock increased in after hours trading by 7% following the release of the quarterly results.
Mark Pincus, the CEO of Zynga said that the following a difficult year, where the value of the company stock fell by 75%, 2013 would be a pivotal and transitional year for the company, as it seeks to cut its costs even more and broaden its sources of income.
In late 2011, the company went public and was received with a great deal of promise by investors. Games such as FarmVille and Cityville became very popular on Facebook, the social media site that was also preparing its own initial public offering.
However, Facebook stock stumbled after its IPO and in turn, the stock of Zynga plummeted. Demand for Zynga games weakened and investors started to worry about the company’s overreliance on just Facebook for the majority if its revenue. In 2012, stock at Zynga fell to $2.36 after its IPO in late 2011 was $10.
At the beginning of its fourth quarter last year, the company said it was cutting up to 5% of its employees who at that the time numbered over 3,200. At the same time, the company shut down 13 of its underperforming games and closed some of its development studios.
Losses for the quarter were $48.6 million down from a loss of $435 million during the same quarter a year earlier. Revenue remained flat at nearly $311 million, but higher than the $250 million Wall Street analysts had predicted.