Why King Digital Earnings Look Better Than Zynga's

As mobile gaming continues to grow, two companies at the forefront are King Digital Entertainment plc (NYSE: KING) and Zynga, Inc. (NASDAQ: ZNGA). Both reported third quarter earnings after the close and are comparable on a few different levels.

King reported its third-quarter earnings Thursday after the market close as $0.56 in earnings per share and $514.4 million in revenue against Thomson Reuters consensus estimates of $0.47 in earnings per share and $495 million in revenue.

The company gave guidance for the fourth quarter of $525 million to $550 million in bookings. There are consensus estimates of $0.46 in earnings per share and $510.13 million in revenue.

Total gross bookings for King digital were $543.9 million and Monthly Active Users (MAU’s) were 495 million for the third quarter, up 134 million or 37% from the previous year.

Candy Crush titles generated $264 million or roughly 49% of total gross bookings for the third quarter. Year over year Candy Crush bookings increased 167% from its previous level of 15% in the same quarter last year. Four King games were in the top 15 grossing games on the Apple App Store and Google Play Store in the U.S.

King Digital also announced that there would be a $150 million share repurchase program.

Shares of King Digital closed Thursday down 3% at $13.19. Following the release of the earnings report, the initial response in the post market was positive and shares were up about 2.6% at $13.51.

The company’s stock has a consensus analyst price target of $18.00 and a 52-week trading range of $10.68 to $23.48. It has a market cap of $4 billion.

Zynga reported its third-quarter earnings Thursday after the market close as -$0.01 in earnings per share and $176.6 million in revenue against Thomson Reuters consensus estimates of -$0.01 in earnings per share and $171.66 million in revenue. The third quarter from the previous year had -$0.02 in earnings per share and $152.11 million in revenue.

The company gave guidance for the fourth quarter of -$0.06 to -$0.04 in earnings per share and $170 million to $200 million. There are consensus estimates for the fourth quarter of $0.00 in earnings per share and $200.19 million in revenue.

Zynga generated $175 million in bookings with a net loss of $7 million. From the previous year there was a 111% increase in mobile bookings which represent 55% of total bookings.

MAU’s for Zynga in the third quarter was 112 million which fell from 133 million in same period of the previous year. Also MAU’s were down 14% sequentially from the second quarter.

Shares of Zynga closed Thursday up 0.4% at $2.36. Following the release of the earnings report, the initial response in the post market was positive and shares were up 8% at $2.55.

The company’s stock has a consensus analyst price target of $3.40 and a 52-week trading range of $2.20 to $5.89. It has a market cap of $2 billion.