Nuance Communications Reports a Solid Quarter; Shares Plunge

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Shares of Nuance Communications are trading down 5% in after-hours market action, driven by a brand-new fourth-quarter report.

Nuance saw non-GAAP sales edge up by 4.5% year over year, landing right at the $490 million analyst target. The non-standard revenue figure includes $18 million of adjustments to account for intellectual property royalties that would have accrued if Nuance hadn't acquired a number of direct customers in 2013.

On the bottom line, Nuance reported non-GAAP earnings of $0.30 per share, down from $0.51 in the year-ago quarter and just above Wall Street's $0.29 estimate.

Nuance shares took a 4% dive on the news, marking a new 52-week low. The stock has now plunged 38% below 52-week highs that were set in early February.

Nuance is growing the number of time-limited license deals for its speech recognition and optical character reading products, while reducing the amount of buy-once package sales. To help investors track this business model change, management included a metric on order bookings for the first time.

Nuance expects bookings to grow roughly 15% in fiscal year 2014 while non-GAAP revenue should increase by 5%. The modest revenue guidance helps explain Nuance's abrupt share-price drop. The bookings clarification may not have registered with Nuance investors yet.

You can access Nuance's fourth-quarter report on the company's Investor Relations site, alongside a copy of prepared remarks for the upcoming analyst call.

The article Nuance Communications Reports a Solid Quarter; Shares Plunge originally appeared on

Fool contributor Anders Bylund has no position in any stocks mentioned. Check out Anders' bio and holdings, or follow him on Twitter, LinkedIn, and Google+. The Motley Fool recommends and owns shares of Nuance Communications. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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