Nuance Communications, Inc. (NASDAQ: NUAN)
Nuance Communications, the leader in voice recognition technology, on Monday reported financial results for the fourth quarter and full fiscal year 2015 that beat consensus estimates propelling the stock up more that 18% on Tuesday.
NUAN Earnings
Nuance reported that Non-GAAP earnings for the fourth quarter were $0.41 per share on revenue of $513.3 million, beating analyst consensus estimates of $0.35 per share and $507.8 million respectively. For the full fiscal year 2015, the company reported Non-GAAP revenue of $1.98 billion and earnings of $1.27 per diluted share versus consensus estimates of $1.97 billion and $1.23 respectively. Nuance also reported record cashflow from operations of $487.6 million and year-end cash balance of $568.8 million. Business Wire
CEO Comments
During the earnings conference call, Paul Ricci, Nuance Communications, Inc. Chairman & CEO, said:
“Earlier this year we initiated a transformation program to focus our product investments on our best growth opportunities, increase operating efficiencies, reduce costs and further enhance shareholder value through share buybacks. This program is delivering measurable results that are evident in our improved performance this quarter. For example, non-GAAP gross margin improved year-over-year in nearly every revenue category and we saw year-over-year cost reductions in every operating expense line. To date, we’ve completed actions that realized more than $75 million in sustainable annualized savings. We’re progressing well and remain committed to our goal of $125 million in annualized expense reductions by the close of FY16.” Yahoo Finance
NUAN Technical Analysis
Tuesday’s action was textbook gap-and-go. The stock gapped up 8.5% from Monday’s closing price and immediately shot through pre-market highs and never looked back, closing up 18.5% at $20.21. The stock traded well above VWAP all day and did not dip below the 9-day exponential moving average until the afternoon. NUAN had a strong push into the close reaching a high of $20.41, a price last seen 2-1/2 years ago before the April 2013 gap down. That gap closes at $22.75 but NUAN has a history of taking its time closing gaps. No surprise that there was profit taking in the last several minutes of trading with the stock closing at the 9-day EMA. NUAN is considered a mid-cap to large-cap stock with a float of 306 million shares. It tends to have big moves on the day of the catalyst and then grinds forward in a tight range on an intra-day basis. If the market remains bullish and institutions continue to buy NUAN, it could grind higher for several days. On the bearish side, a sustained break below VWAP and the moving averages could mean the markets love affair with NUAN will be short lived. Support sits at the $0.25 levels so watch $20, $19.75. $19.50 etc., and a move below $19 is where a lot of Tuesday’s buyers will likely panic.
About Nuance Communications, Inc.
Nuance Communications, Inc. is a provider of voice and language solutions for businesses and consumers across the world. The Company’s solutions are used in healthcare, mobile, consumer, enterprise customer service, and imaging markets. The Company offers accuracy, natural language understanding capability, domain knowledge and implementation capabilities. The Company’s solutions are based on the Company’s voice and language platform and are used by businesses for tasks and services, such as requesting information from a phone-based self-service solution, dictating medical records, searching the mobile Web by voice, entering a destination into a navigation system, or working with portable document format (PDF) documents. The Company offers its solutions to its customers in a range of ways, including through products, hosting, professional services and maintenance and support. The Company operates in four segments: Healthcare, Mobile and Consumer, Enterprise, and Imaging. Google Finance
