Shares of Nuance Communications (NUAN - Free Report) gained 3.1% to close at $16.77 on Feb 8 following the announcement of its first-quarter fiscal 2019 results.
The company reported adjusted earnings of 33 cents per share, which beat the Zacks Consensus Estimate of 29 cents. Under ASC 605, the figure came in at 30 cents per share, which increased 30.4% from the year-ago quarter.
Starting this quarter, Nuance adopted the new revenue recognition accounting standard, ASC 606. The comparisons with the year-ago quarter are in compliance with ASC 505.
Notably, the stock has returned 4.2% compared with the industry’s rally of 19.3% in the past year.
Total revenues of $495.2 million however lagged the Zacks Consensus Estimate of $507 million. Under ASC 605, the figure came at $465.7 million, which increased 2.8% from the year-ago quarter.
The company witnessed robust growth in Dragon Medical Cloud offerings. Outperformance in this segment can be attributed to the company’s effort to expand internationally. Further, strong demand for Nuance’s AI powered Omnichannel customer engagement solutions and services drove the top line.
Hosting & Professional services revenues increased 3.8% year over year (per ASC 605) to $259.6 million (per ASC 606).
Product & Licensing revenues increased 8.5% from the year-ago quarter to $157.9 million However, Maintenance & support revenues declined 5.9% from the year-ago quarter to $76.1 million.
Nuance benefited from new design wins across Automotive, Voice and Security solutions and Enterprise business in the reported quarter.
However, the company witnessed decline in EHR implementation services, back-end transcription services, and the continued wind down of devices and SRS businesses.
Nuance completed the sale of its imaging business in the reported quarter for $400 million. The proceeds from the sale will be used to pay off the company’s huge debts. Further, Nuance expects to complete the spin-off of its Automotive business in 2019.
Nuance Communications, Inc. Price, Consensus and EPS Surprise