Nuance Communications Earnings: Here’s Why Investors are Selling Shares Now

Nuance Communications, Inc. (NASDAQ:NUAN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 17.32%.

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Nuance Communications, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 20.93% to $0.34 in the quarter versus EPS of $0.43 in the year-earlier quarter.

Revenue: Rose 23.99% to $484 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Nuance Communications, Inc. reported adjusted EPS income of $0.34 per share. By that measure, the company missed the mean analyst estimate of $0.4. It missed the average revenue estimate of $516.53 million.

Quoting Management: “We are disappointed with our results for the second quarter, which were driven by a combination of execution issues and external factors. We have taken immediate corrective actions to improve the performance of our business and revised our operating plan accordingly,” said Paul Ricci, Nuance Chairman and CEO. “Despite short-term setbacks, we continued to make advancements in the quarter, earning design wins and new bookings in new strategic product areas including our automotive business and Nina solutions for customer care. Our share buyback program announced today underscores our confidence in the business and our focus on shareholder value as we expect growth to accelerate in fiscal 2014.”

Key Stats (on next page)…

Revenue increased 4.7% from $462.27 million in the previous quarter. EPS decreased 2.86% from $0.35 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.51 to a profit $0.49. For the current year, the average estimate has moved down from a profit of $1.89 to a profit of $1.8 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]