Nuance Communications (Nasdaq: NUAN) reported stronger third-quarter earnings than expected but weaker sales. Instead of rewarding the company for turning a strong profit on shoestring revenues, the stock dropped like a rock this morning. Oh well -- there's another buy-in opportunity for you!

Sales grew by 13% year-over-year to $273 million. The company's "adjusted revenue" came in at $293 million, well below the $325 million expected by the average analyst. (Who is that guy, anyway?) The company reported a GAAP net loss of $1.5 million or $0.01 per share, roughly in line with the $2.8 million (still just $0.01 per share) of losses seen a year ago. The main concern with this quarter's earnings: weakness in the mobile segment.

So yeah, there are some issues for Nuance to work through. The mobile space should be a veritable goldmine for Nuance these days, as its expertise in voice recognition and optical character recognition seems to go hand in hand with the needs and capabilities of a modern smartphone. Motorola (NYSE: MOT) should be breaking down Nuance's doors to get moat-building features for the next Droid model -- if it can beat Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) to that door. That scenario doesn't appear to be playing out today, but I'd keep an eye on it going forward.

The main thing for Nuance today is cash flows. Much of the company's sales are hidden away as deferred revenue due to long-term license and service contracts, but cash is cash and you can't hide that. Cash flow from operations got a 19% year-over-year boost to $64 million, making a mockery of the near-breakeven reported earnings. Cash flow would have been even better were it not for a couple customers paying later than their usual schedule and pushing $7 million into the fourth quarter.

So I'm confident that Nuance has plenty of untapped opportunities ahead, while strong cash flows show that today's business is doing far better than the market gives the company credit for. I'm heading over to CAPS to take advantage of today's low, low prices while they last. This is a very volatile stock, so I better move fast -- today's 12% drop brings the stock back to levels not seen since -- gosh, since early July. Like I said, things move fast in Volatility City.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Apple is a Motley Fool Stock Advisor selection. Nuance Communications is a Motley Fool Hidden Gems recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.