Candy Crush-Maker King Digital Jumps as New Game Sales Increase

King Digital Entertainment Plc surged in extended trading after sales of titles other than Candy Crush Saga increased from the previous quarter, signaling the company is diversifying from its top-selling game.

King jumped as much as 21 percent after the close. Investors had a different reaction to Zynga Inc., the casual game maker of FarmVille, sending its shares down as much as 14 percent after it projected results that trailed analysts’ estimates.

Zynga and King have struggled to build on their marquee hits and prove that they’re not one-hit wonders. While Zynga, once the leader in games played on Facebook, has made headway moving its titles to smartphones and tablets, progress is taking longer than expected, according to Michael Pachter, an analyst at Wedbush Securities in Los Angeles.

“The stock is down because we don’t get relief this quarter,” said Pachter, who has a buy rating on Zynga shares.

Zynga, based in San Francisco, forecast revenue of $155 million to $165 million this quarter, missing the $195.2 million average of analysts’ estimates compiled by Bloomberg.

The company also said it would close its China studio, terminating 71 of its Beijing-located employees, after the studio was unable to replicate the success of FarmVille for a local Chinese audience.

It’s a different story for King. Through the close of regular trading today, King shares had tumbled 35 percent since its initial public offering in March as investors questioned whether the company could generate revenue from games other than Candy Crush.

Farm Heroes

The results Thursday reassured investors: Non-Candy Crush titles, such as Farm Heroes and Pet Rescue, generated $324 million in the fourth quarter, the Dublin-based company said in a statement, up from $264 million in the third quarter. The company also reported earnings per share of 57 cents for the last quarter, beating analysts’ estimates by 10 cents.

“Most importantly, non-Candy Crush grew by more than Candy Crush declined, which was the opposite of what shorts expected,” said Pachter, who has a buy rating on King shares.

King also agreed to acquire Z2Live, a game development company, for at least $45 million in cash and declared a special dividend of 94 cents a share.