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Omar Venerio
Omar Venerio
Articles (1728) 

Thursday Morning Market Highlights

Markets up, shares of Zynga falls on earnings

US Markets

U.S. stocks were in the green on Thursday morning. The Dow gained 2.2% to 28,462, the S&P 500 index jumped 2.38% to3,525 and the Nasdaq Composite Index was up 2.6% to 11,893.

Gainers

• United Rentals (NYSE:URI) +4.8%

• Duke Energy (NYSE:DUK) +3.6%

• Uber Technologies (NYSE:UBER) +1.5%

• Loews Corp (NYSE:L) +1.8%

• Mohawk Industries Inc (NYSE:MHK) +1%

Losers

• Hanesbrands Inc. (NYSE:HBI) -19.8%

• Biogen Inc. (NASDAQ:BIIB) -7.2%

• Incyte Corporation (NASDAQ:INCY) -5.7%

Global Markets

The main European stock markets traded in the green. The U.K.'s FTSE 100 gained 0.63%, France's CAC 40 inched up 1.28%, Germany's Dax increased 1.82% and Spain's Ibex 35 rose 2.03%.

In Asia, Japan's Nikkei 225 gained 1.73%, India's BSE Sensex advanced 1.78%, Hong Kong's Hang Seng jumped 3.25% and China's Shanghai Composite was up 1.30%.

Zynga releases earnings report

Shares of Zynga Inc. (NASDAQ:ZNGA) fell more than 9% on Thursday morning after the company announced financial results for its third quarter of fiscal 2020. It posted a loss of 11 cents per share, beating analysts' estimates by 3 cents, on revenue of $503 million, which grew 45.7% year-over-year and beat expectations by $49.33 million.

CEO Frank Gibeau had the following to say:

"We delivered strong results in Q3, ahead of guidance across all key financial measures, including our highest ever quarterly revenue and bookings and best Q3 operating cash flow. Execution of our multi-year growth strategy has driven our tremendous results to date and generated positive momentum across our live services and overall business …Extending our strength in live services, we recently launched one of our key franchises Harry Potter: Puzzles & Spells to global fanfare and positive player reviews and closed our acquisition of Rollic on October 1 – marking our entry into the high-growth, hyper-casual games category. Today, we are raising our full year 2020 guidance and are uniquely positioned to be an interactive entertainment growth leader in 2021 and beyond."

In the quarter, the company registered record online game revenue of $436 million, up 55% year-over-year, and user pay bookings of $561 million, up 69% year-over-year. The international revenue reached $191 million, up 44% year-over year, and international bookings reached $241 million, up 49% year over-year.

Moreover, the company achieved the best average of mobile daily active users and average mobile monthly active users in more than six years. Mobile DAUs of 31 million were up 53% year-over-year, while mobile monthly active users were $83 million, up 23% year-over-year.

Zynga generated operating cash flow of $113 million, up 65% year-over-year.

At the end of June, Joel Greenblatt (Trades, Portfolio) sold out of his investment in the stock.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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