Did Apple's Monster Quarter Shoot Nuance to the Moon?

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The technology around us is becoming more human every day. That's exactly how Nuance Communications (NAS: NUAN) likes it.

The company specializes in translating human communication methods like speech and the written word into data a computer can understand -- and back again. It used to be best known as the company behind the Dragon dictation software and OmniPage character recognition package, but that's kind of old hat now.

What's the new hotness?
When Nuance reports first-quarter results on Thursday night, the mobile world will be watching. Why? Because the company provides the crucial voice-recognition element of Apple's (NAS: AAPL) Siri assistant. You might have heard (or noticed) that Siri makes the iPhone 4S worth owning, and that the phone sold like hotcakes over the holidays. That could mean big dollars for Nuance as well.

Just don't expect management to point out Apple as a growth driver. In fact, they'll probably dodge questions about Cupertino, as nearly every iPhone supplier does. Third-party analysts had to rip the iPhone apart and then X-ray the chips inside to find out who made the digital camera, you know.

Even Cirrus Logic (NAS: CRUS) , which everyone knows as the maker of audio chips for everything Apple, defers to Apple's code of secrecy. It's never "Apple" or "the house that Steve Jobs built," always simply "our largest customer." Never mind that the health of Cirrus' Apple deals play a massive part in the company's value to investors -- management just isn't allowed to talk.

And we don't get to rip the iOS code apart. Nuance has no motivation at all to spill the specific beans unless the relationship triggers SEC reporting requirements.

So mum's the word. The numbers will do the talking this week.

The word on the Street
Wall Street analysts are looking for non-GAAP earnings to jump 29% year over year to $0.36 per share on 22% higher sales. Keep in mind that Nuance has exceeded estimates on both the top and bottom lines in each of the past three quarters.

Furthermore, these guys change their mind sometimes: In the past two months, three out of 19 analysts following Nuance have raised their earnings estimates for this quarter, and five boosted their revenue targets (with one stickler lowering its sales estimate). Oppenheimer explicitly expects an iPhone 4S boost, for example.

That said, Nuance's revenues shouldn't jump in lockstep with Apple's 128% higher iPhone sales. In the past three fiscal years, Nuance hasn't seen any single customer make up more than 10% of its highly diversified customer base. Cupertino's monster results might change that, but still -- it's not as if Nuance lives and dies by one client here.

In fact, Nuance also ships speech solutions on more than 70 current Android phones and virtual keyboards for "hundreds of Android devices." All things considered, Nuance probably had a very good quarter. Mobile sales played a big part, but it ain't all Apple's doing.

If you're looking for another stock in the mobile space that Foolish analysts love, check out this short list of the three best smartphone plays from the chip industry -- including a detailed analysis of Cirrus Logic. It's free today but might be gone tomorrow, so get your copy right away.

At the time this article was published Fool contributorAnders Bylundholds no position in any of the companies mentioned. The Motley Fool owns shares of Apple and Cirrus Logic.Motley Fool newsletter serviceshave recommended buying shares of Apple and Nuance Communications and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.

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