Diary of a Financier

Followup: Nuance Communications, Big Miss on 4q10 EPS

In Capital Markets on Wed 9 Feb 2011 at 18:33
  • NUAN 4q10 EPS miss (shares -11% AH).
  • We closed our position throughout January, and NUAN is now down 15% since then.

As I just caught a whiff of their 4q2010 earnings call, I wanted to followup on Nuance (NUAN) in the wake of having closed our position.

First, the poor EPS announcement this evening:

Wednesday 4:37 PM- Nuance Communications (NUAN):

FQ1 EPS of $0.28 misses by $0.03.

Revenue of $317M (+12% Y/Y) misses by $3M.

Shares -11.1% AH. (PR)

In way of recollection, I started trimming our position at $19.50 on January 7:

I sold to cover our original principal, leaving our gains on the table in an attempt to capture the upside between here & resistance at $21.  Given the bullish weekly & monthly trends, I think $21 is attainable for NUAN.

Then, after NUAN topped out at $20.97, we sold the rest by January 21 for a net average gain of +26%.

With tonight’s earnings announcement, our call to close the position (at the top) is conclusively vindicated: in afterhours trading, the last print I saw was $18 even.  That means NUAN is off a full 15% since my last sale on January 21.

–Romeo

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