Nuance Communications' Loss Widens

SAN FRANCISCO - Nuance Communications'(NUAN Quote - Cramer on NUAN - Stock Picks) second-quarter revenue surpassed the Street's expectations, but expenses soared, expanding the company's loss.

Revenue at the speech-recognition software developer was up 63% to $219.9 million, including deferred revenue lost to accounting from several acquisitions, from a top line of $134.6 million for the same quarter of last year. Analysts were expecting revenue of $214.3 million, according to Thomson Reuters.

The Burlington, Mass., company posted a loss of $28.8 million, or a loss of 13 cents a share, as the expense of hosting subscription-based software services more than doubled.

Other costs also rose: Research investment grew 75%, while administrative expenses rose 60%. Amortization costs nearly tripled to $14.2 million.

A year ago, Nuance posted a loss of $1.7 million, or a penny a share.

Excluding special items, EPS was 18 cents, in line with analysts' estimates.

The stock was down 51 cents, or 2.4%, to $20.50 in after-hours trading.

In the text-to-speech and speech-to-text market, Microsoft(MSFT Quote - Cramer on MSFT - Stock Picks) acquired TellMe, which develops speech recognition software, in 2007. And IBM's(IBM Quote - Cramer on IBM - Stock Picks) ViaVoice software provides similar capabilities for mobile devices.