The company responsible for FarmVille and CityVille has lowered its annual earnings forecast for the second time in under three months, announcing preliminary financial results that sent Zynga's stock tumbling in after-hours trading.
Zynga said today it now expects to post a quarterly loss between $90 million and $150 million for the third quarter that ended on September 30th. Quarterly earnings are expected to fall somewhere in the $300 million to $305 million range. Zynga blamed its poor performance on "weakness of certain games" and an impairment charge of $85 million to $95 million related to its purchase of Draw Something developer OMGPOP.
"The third quarter of 2012 continued to be challenging and, while many of our games performed to plan, as a whole we did not execute to our satisfaction," said Mark Pincus, CEO and founder of Zynga, in a release. Pincus says Zynga will be "implementing targeted cost reductions in the fourth quarter and rationalizing our product R&D pipeline to reflect our strategic priorities."
Zynga boasts 311 million monthly active users in its player network and calls the launch of FarmVille 2 its "most successful launch since CastleVille in terms of daily bookings."
The company noted worse than expected performance of The Ville and the delayed launch of unspecified games in its lowered annual earnings forecast. Zynga now expects annual revenue of $1.085 billion to $1.100 billion, down from previous estimates of $1.150 billion to $1.225 billion.
Zynga says it will release its full financial results for Q3 on October 24th.
Over the past two quarters, Zynga shares have dropped from about $12 to close at $2.82 today, dropping further in after-hours trading. Since July, Zynga has been hit with insider trading and copyright infringement lawsuits amidst the departure of key executives.