Nuance Communications' Loss Widens

Updated from 4:50 p.m. EST

SAN FRANCISCO - Nuance Communications'(NUAN Quote - Cramer on NUAN - Stock Picks) first-quarter loss widened on the heels of several acquisitions, but the company forecast a strong second quarter.

The Burlington, Mass. speech-recognition software company said first-quarter revenue rose 46% to $195 million, from $133.4 million in the same quarter of the prior year.

Excluding $14 million lost to purchase accounting, revenue was $209.1 million. Analysts were expecting $200 million, according to Thomson Financial.

The company's loss widened to $15.4 million or 8 cents a share, from $1.2 million, or a penny a share, one year ago.

Excluding items, EPS was 18 cents, a penny ahead of analysts' estimates.

Shares in the developer of text-to-speech and speech-to-text software were off 15 cents, or 0.9%, to $16.10 in after-hours trading.

On a conference call, Chairman and CEO Paul Ricci forecast second-quarter revenue of $187.7 million to $197.7 million, or a loss of 12 cents to 14 cents a share. Excluding revenue lost to purchase accounting on acquisitions, revenue will range from $210 million to $218 million. EPS, less items, will be 17 cents to 19 cents. Analysts were expecting a top line of $207.5 million and EPS of 18 cents.

Higher expenses during the first quarter were due to higher headcounts, $1 million in higher interest rates, and heavier-than-expected investment in new network mobile services. Meeting carriers' standards for such services is technologically and operationally demanding, Ricci said.

The company expects to see acquisition synergies during the second quarter, and the growth in expenses during the last quarter is not expected to recur, Ricci said.

Operating cash flow rose 57% year over year to $41 million during the quarter, according to the company.

During 2007, Nuance completed or announced the acquisition of Viecore, VoiceSignal, Vocada, Tegic Communications and Commissure.