The updated guidance added just a penny per share to previous earnings outlooks, but the new forecast was still enough for investors to bid shares up 15% yesterday. Even that boost still leaves shares down some 25% since last quarter's earnings announcement, but the fact that there's no real bad news in the coming quarter is music to investors' ears.
The company says its flagship Dragon Naturally Speaking software has gotten an enthusiastic welcome since its release. And the mobile sector continues to be strong, as device makers such as Nokia
Confidence is running high on the acquisition front as well: Nuance will take over the speech-recognition division at Philips
So will Nuance prove resilient in this dire market? I wouldn't go that far. I think management is still making prudent, though aggressive, moves to expand the business, but macroeconomic factors and costs from past acquisitions will weigh on future growth.
Consider that auto sales have plummeted in September -- Ford saw sales drop 34% from a year ago, General Motors
Nuance did say it will slow its acquisition pace in fiscal 2009 in response to the volatile market. So at least investors won't be seeing more dilution from stock payments -- for the time being, anyway.
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Fool contributor Dave Mock kicks tires on a regular basis, even his own. He owns shares of Motorola. Nuance is a Hidden Gems recommendation. The Fool's disclosure policy recognizes 55 languages and speaks fluent Icelandic.