Glu Mobile (GLUU) wants to remind investors that it's not tethered at the hip to Zynga (ZNGA).
The developer of mobile games is reiterating its outlook for the quarter that recently ended, just three trading days after Zynga warned that it would come up short during the same three months and for all of 2012. Glu Mobile's original guidance called for an adjusted EBITDA loss of $3.1 million to $4 million on $20.25 million to $21.25 million in non-GAAP revenue.
Even though it launched 11 titles during the quarter -- two more than it was originally targeting -- the lack of any blockbuster releases finds Glu Mobile sticking to its top-line forecast. However, it does see its quarterly deficit leaning toward the more favorable end of its earlier adjusted EBITDA range.
The new quarter should be better. Glu has healthy hopes for success with Contract Killer 2 and Death Dome, two of its bigger releases slated by year's end. IIt expects to break even or better on an adjusted EBITDA basis, though it will have a clearer snapshot when it reports its third-quarter results early next month.
Why is Glu Mobile bothering to reiterate its guidance? Well, even though Zynga's stock tumbled 13% last week, Glu Mobile suffered a 14% plunge. Just a modest "I'm OK" a few days after Zynga pulled up lame is a smart tactical move.
Sure, another catalyst for the announcement was that Glu Mobile's stock took a 19% dive on Tuesday. The stock tanked even though Glu Mobile announced an overseas partnership that would allow it to enter the real-money gaming business in some international markets.
The revenue-sharing partnership -- where Glu Mobile contributes its intellectual property without dabbling in the regulatory hassles -- could be substantial for a company commanding a market cap of merely $215 million. Yes, Glu Mobile is likely to post a deficit this year, but analysts still see a healthy profit of $0.18 a share next year on a 36% top-line surge.
Glu Mobile isn't Zynga. It doesn't rely on Facebook (META 2.59%) or even its namesake website to draw most of its gamers. Glu Mobile specializes in "freemium" game apps for iPhones and Android devices. The downloads are free, but virtual goodies that help enhance the gameplay and move the game along cost real money.
Sure, Zynga's hoping to wean itself off of its Facebook diet. It's a big player in mobile with games including Words With Friends and Draw Something. However, they're not Siamese twins.
They never were, even though Mr. Market keeps making the same mistake.
Playing to win
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