Boston, MA 02/11/2013 (wallstreetpr) – Speech recognition software maker Nuance Communications Inc. (NASDAQ:NUAN) declined to its lowest point in over six years after it lowered its annual sales and profit forecasts. Novel technologies are gaining rapid recognition among customers, making transcription services obsolete, the company said.
The company slashed its fiscal year 2013 sales forecast to $2.15 billion from $2.2 billion as against the projected revenue range between $2.17 billion to $2.22 billion. Initial projections of $1.84 to $1.94 adjusted earnings per share were also lowered to $1.76 – $1.87.
The company said it lowered the projected figures as transcription volume was shrinking while demand for the latest technologies like speech to text software and electronic medical records, peaked. Another factor behind the decline in estimates was the inhibition to spend among the enterprise clientele.
Many enterprise customers have postponed their purchases amid a temporary standstill in the personal computer market before the launch of Microsoft Corp. (NASDAQ:MSFT)’s new Windows 8 software. A staggering European economy also worsened the trends of restrained buying in the corporate sector.
Nuance Communications Inc. (NASDAQ:NUAN)’s stocks declined by over 19% which is its largest plunge since 2006. All in all the stock lost 10% during 2012 while the Russell-1000 Index advanced 6.7%. The software maker specializes in mobile devices and health care technologies.
According to a research lead by Mark Murphy, a Piper Jaffray Co. (NYSE:PJC)’s analyst, the stock could end up “in the penalty box until growth can accelerate”.
The shares of Nuance Communications Inc. (NASDAQ:NUAN) were down by 18.53% to close at $20. The Microsoft Corp. (NASDAQ:MSFT) were up 0.98% to close at $28. Piper Jaffray Co. (NYSE:PJC) shares were up by 0.19% to close at $41.48.