Loss Expands at Nuance Communications

The 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: Amortization of intangibles nearly tripled to $14.2 million. Research investment grew 75%, while administrative expenses rose 60%.

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 company's recently acquired Viecore unit, which provides consulting and systems integration services, saw falling margins during the quarter, but those margins should improve in coming quarters, executives said.

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.

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