Monday, speech-based solutions provider Nuance Communications, Inc.(NUAN), reported a lower profit for the fourth quarter from last year, impacted by a huge income tax provision. Adjusted earnings for the quarter, however, came in line with estimates.
The Burlington, Massachusetts-based company's fourth quarter GAAP net income dropped to $6.29 million or $0.02 per share from $22.01 million or $0.09 per share for the year-ago quarter. Non-GAAP net income was $90.78 million or $0.32 per share, down from $71.05 million or $0.29 per share in the same quarter last year.
Non-GAAP adjustments include non-cash income taxes of $23.24 million, acquisition-related adjustment of $12.42 million, amortization of intangible assets of $20.67 million and non-cash stock based compensation of $18.82 million.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.29 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Nuance reported fourth quarter GAAP revenue of $263.3 million, a 3.9% increase over $253.4 million in the prior year quarter. Non-GAAP revenue was $275.7 million, up 5.8% from $260.7 million in the same quarter last year. Analysts expected revenue of $272.14 million for the quarter.
Commenting on the fourth quarter results, Paul Ricci, Chairman and Chief Executive Officer said, "Nuance's fourth quarter demonstrated a continuation of recent quarter trends, including a recovery in royalty and license revenues, increasing customer preference for on-demand solutions and sustained attention to cost and productivity initiatives."
On segment basis, the company's major source of revenues, product and licensing revenue slipped to $113.38 million from $125.77 million last year. However, professional services and hosting segment revenues surged to $107.20 million from $88.60 million a year earlier.
Quarterly revenue from Nuance's smallest revenue segment' maintenance and support rose to $42.75 million from $39.02 million last year.
Total cost of revenues rose to $94.91 million from $84.12 million for the same period last year. Cost of revenues related to professional services and hosting segment increased to $65.19 million from $57.18 million last year. Amortization of intangible assets expense increased to $10.95 million from $6.40 million a year-ago.
Total operating expenses declined to $135.98 million from $137.29 million for the year earlier period, sales and marketing expenses dropped to $57.24 million from $62.95 million last year.
For the full year, net loss narrowed to $12.20 million or $0.05 per share from $30.07 million or $0.14 per share for the same period last year. On an adjusted basis, non-GAAP net income was $288.44 million or $1.06 per share, up from $202.90 million or $0.87 per share a year-ago.
Total revenues for the full year increased to $950.35 million from $868.46 million in the same period last year. Revenues were helped by a rise in professional services and hosting revenues of $411.36 million, compared to $305.54 million a year earlier.
On average, sixteen analysts expected earnings of $1.03 per share, on revenue of $1.01 billion for the full year.
Looking forward Ricci said, "The gradually improving economic climate, on-going investments in sales and channels, and our leadership position in key markets position us for improved growth in fiscal 2010."
Monday, NUAN closed at $13.75, unchanged from its previous closing, on a volume of 3.18 million shares on the Nasdaq. In after hours, the stock gained $0.25 to trade at $14.00, up 1.82%
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