In the following video, Motley Fool senior technology analyst Eric Bleeker takes a look at the earnings report for Nuance Communications , which provides speech recognition applications, among other things, and is thought to be behind the voice recognition abilities of the iPhone's Siri. He notes how the company fell hard after releasing earnings, largely because it has committed a remarkably familiar earnings "crime" -- namely, contracting margins in the mobile space -- as net earnings trail behind revenue growth, spooking investors. Eric tells us why this is such a cause of investor concern, and what the silver lining might be.
Speech recognition is yet another nascent technology set to explode with the rise of tablets and smartphones, and no company is better poised to benefit from this coming boom than Nuance Communications. However, this growth story doesn't come without risks, too. The Motley Fool recently published a premium research report to break down what investors interested in Nuance absolutely have to understand before investing, so click here now to grab your copy today.
The article Nuance Commits the Apple Earnings Crime originally appeared on Fool.com.
Eric Bleeker, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple and Nuance Communications. The Motley Fool owns shares of Apple and Nuance Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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