Nuance Communications Q1 Results Top View, Boosts 2014 EPS Outlook

(RTTNews) - Voice and language solutions provider Nuance Communications, Inc. (NUAN) reported Monday a net loss for the first quarter that widened from last year, reflecting charges and significantly lower margins amid higher expenses. However, both adjusted earnings per share and adjusted revenues topped analysts' expectation.

The company also raised its earnings guidance for the full-year 2014, while reaffirming annual revenue forecast.

"We are pleased with our first quarter performance. We delivered strong bookings and exceeded targets for revenue and earnings. Increased deferred revenue and growth in on-demand revenue demonstrate continued progress in transitioning our model to recurring revenues," CFO Tom Beaudoin said in a statement.

The Burlington, Massachusetts-based speech-software company reported a net loss of $55.41 million or $0.18 per share for the first quarter, wider than $22.10 million or $0.07 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $76.65 million or $0.24 per share, compared to $112.96 million or $0.35 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues grew to $469.98 million from $462.27 million last year. Meanwhile, adjusted revenues for the quarter was $490.05 million, compared to $492.42 million in the same quarter last year, and topped fourteen Wall Street analysts' consensus estimate of $485.15 million.

Healthcare adjusted revenue grew 4.6 percent, while mobile & consumer adjusted revenue decreased 12.5 percent from last year. Enterprise adjusted revenue improved 6.6 percent, while imaging adjusted revenues declined 2.2 percent from last year.

Adjusted operating margin for the quarter contracted 760 basis points to 21.6 percent from last year's 29.2 percent.

Nuance ended the first quarter with total deferred revenue of $484.3 million, compared to $376.3 million at the end of the year-ago quarter. Nuance also reported a 26.2 percent increase in bookings to $637.3 million from $504.9 million in the prior-year quarter.

Looking ahead to the second quarter, the company expects adjusted earnings in a range of $0.21 to $0.25 per share, on projected adjusted revenues between $476 million and $490 million. Analysts currently expect the company to report a second-quarter earnings of $0.25 per share, on quarterly revenues of $497.81 million.

For fiscal 2013, the company raised its adjusted earnings guidance by $0.02 per share to a range of $1.07 to $1.17 per share from the prior forecast, while reaffirming its adjusted revenue forecast between $2.03 billion and $2.09 billion.

Street is currently looking for full-year 2014 earnings of $1.09 per share, on annual revenues of $2.06 billion.

"We believe these results, combined with progress toward new solutions and deep customer engagements, are a strong indication that the business is well-positioned for renewed growth and profitability," Beaudoin added.

NUAN closed Monday's regular trading session at $15.76, up $0.04 or 0.25% on a volume of 6.48 million shares. However, the stock lost $0.41 or 2.60% in after-hours trading.