The 10-second takeaway
For the quarter ended June 30 (Q3), Nuance Communications beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Gross margins dropped, operating margins increased, net margins improved.
Nuance Communications logged revenue of $448.2 million. The 17 analysts polled by S&P Capital IQ expected net sales of $438.5 million on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $328.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.45. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.39 per share. GAAP EPS of $0.25 for Q3 were 92% higher than the prior-year quarter's $0.13 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 66.9%, 30 basis points worse than the prior-year quarter. Operating margin was 12.9%, 210 basis points better than the prior-year quarter. Net margin was 18.4%, 570 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $500.5 million. On the bottom line, the average EPS estimate is $0.47.
Next year's average estimate for revenue is $1.74 billion. The average EPS estimate is $1.63.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 5,474 members out of 5,718 rating the stock outperform, and 244 members rating it underperform. Among 1,363 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,324 give Nuance Communications a green thumbs-up, and 39 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nuance Communications is outperform, with an average price target of $30.24.
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