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Nuance Communications (NUAN) Message Board

  • hooveredbyndavis hooveredbyndavis Nov 20, 2012 11:06 AM Flag

    Analyst snippets

     

    By Reinhardt Krause, Investor's Business Daily
    Posted 10:31 AM ET

    Shares of Nuance Communications (NUAN) were down 4% in early trading Tuesday after the speech recognition software maker reported fiscal Q4 revenue that missed expectations, though earnings beat views.

    Nuance, which reported its results after the market close on Monday, said it earned 51 cents per share minus items, up 212% from the year-ago figure and ahead of analyst consensus estimates of 48 cents.

    Burlington, Mass.-based Nuance said sales rose 28% to $490 million, shy of expectations for $498 million in revenue.

    "Nuance posted mixed September results as the company slightly missed the street on the top line while coming in ahead on the bottom line due to tight cost controls/better operating margin performance," said Daniel Ives, analyst at FBR Capital Markets, in a report.

    "While the company's mobile and enterprise performance were impressive in a tough environment, Nuance came up shy on health care revenues. Importantly, the company gave stronger-than-expected guidance for fiscal 2013, as Nuance is expecting healthy double-digit organic growth, which is very impressive in light of the choppy IT spending environment."

    Nuance's stock is down nearly 20% in 2012, though its software is widely believed to be part of Apple's (AAPL) Siri voice-command feature in its iPhones. The relationship between Nuance and Apple has never been spelled out, however, and some analysts says Nuance gets fixed licensing fees from Apple, not revenue based on iPhone sales, as IBD has reported.

    Joanna Markis, analyst at Mizuho Securities, on Tuesday lowered her price target on the stock to 26 from 28 but kept a buy rating. The stock is trading near 20.70. "Solid F4Q12 earnings results reflected continuing momentum in mobile albeit lumpiness in health care," she said in a report.

    Markis said Nuance's acquisitions have weighed on the stock. But she says the company is trading at an attractive price.

    "Shares have been under recent pressure, having declined about 12% over the past three months (vs. 8% for the Nasdaq), reflecting balance sheet concerns (increased debt position and accelerating M&A). ... We find valuation attractive for this leader in speech recognition."

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