The stock price of Nuance Communications Inc. (NASDAQ:NUAN) is up by 6 percent today after activist investor, Carl Icahn revealed a 9.3 percent passive stake in the company.
Nuance Communications Inc. (NASDAQ:NUAN) develops speech-recognition and digital imaging software. The company’s speech recognition technology is used by Apple Inc. (NASDAQ:AAPL)'s in the iPhone devices for the Siri voice feature.
Tom Roderick, analyst at Stifel Nicolaus & Co believed that Carl Icahn might push to split the company. According to him, the stock value of Nuance Communications Inc. (NASDAQ:NUAN) declined significantly after lowering its earnings and sales expectations due to changing demand for software.
Carl Icahn generally invest in companies that are undervalued or not properly managed and uses his stake in the company to push for changes to increase value for shareholders.
“Any time you get an activist shareholder involved, the perception is, there’s something within the structure of the company they’d like to change. More value could be unlocked by selling pieces of the company,” Roderick said.
In February, Nuance Communications Inc. (NASDAQ:NUAN) reported $462.3 million GAAP revenue for the first quarter of fiscal 2013. The result was 28.2 percent higher than its GAAP revenue in the same period a year ago. However, the company posted a net loss of $22.1 million or -$0.07 per share. Its non-GAAP net income was $113 million or $0.35 per diluted share.
During the first quarter, the company said its Nuance’s healthcare solutions generated non-GAAP revenue of $217.4 million, a 49.6 percent increased in the same quarter in fiscal 2012. According to the company, its bookings include large eScription, Dragon Medical, radiology and coding contracts. Its primary healthcare clients include AHS, Atlanta, Basset Healthcare, Christian Healthcare, Dolby Laboratories, Inc. (NYSE:DLB), HCA, Novant Health, Plametto Health, PeaceHealth, UMass, and University of Missouri.
Yesterday, Nuance Communications Inc. (NASDAQ:NUAN) launched Voice Ads, a new mobile advertising solution that allows people to have a two-way conversations with their favorite brands. According to the company, Voice Ads is integrated with its voice technology, which makes mobile advertising conversational, engaging, and entertaining.
The company created partnerships with leading companies in the mobile advertising ecosystem to ensure a wide distribution of Voice Ads. Nuance Communications Inc. (NASDAQ:NUAN) said, “Nuance Voice Ads gives mobile advertises and creative agencies an opportunity to go beyond limitations of the four-inch mobile device screen and create a conversation with consumers through the power of voice recognition.”
Brett Leary, vice president of Mobile for Digitas and one of the advertising agencies that partnered with Nuance Communications said, “Compelling user experience are critical to mobile advertising-you have only a few seconds to capture the interest of a demographic that is always on the go, multitasking and seeking instant gratification. Voice Ads engages multiple senses while creating an even stronger emotional connection through conversation with a brand.”