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Nuance Gains Most Since 2009 as Profit Tops Estimates

Nuance Communications Inc., a maker of speech-recognition software, rose the most in more than two years after reporting preliminary second-quarter profit and revenue that topped analysts’ estimates.

Nuance advanced 9.3 percent to $24.91 at the close in New York, for the biggest increase since November 2009. The Burlington, Massachusetts-based company’s shares have dropped 1 percent this year.

Nuance, which provides technology for health-care and other businesses, said today it completed its purchase of Transcend Services Inc., a provider of medical-transcription services. The health side of the business is growing faster than its call-center speech software unit, said Scott Sutherland, an analyst with Wedbush Securities Inc.

“The revenue growth was a positive. But the quality of the beat doesn’t look as good when you take a closer look,” said Sutherland, who rates the shares the equivalent of sell.

“People would much rather hear good news on the mobile side,” where a decline contributed to an earnings miss in the fourth quarter, he said. “That’s where the sizzle is.”

Profit excluding some items for the quarter ended March 31 was probably 42 cents to 43 cents a share, up from a previous projection in February of 36 cents to 40 cents, Nuance said in a statement today. Analysts projected 38 cents, the average of estimates in a Bloomberg survey.

Adjusted revenue for the period was probably $416 million to $418 million, the company said. Analysts in a Bloomberg survey had estimated $404.8 million.

The company is scheduled to report results on May 10.

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