Midday Commentary: Nuance convertibles up in line on improved guidance; Cemex trades

By Rebecca Melvin

New York, Jan. 22 - Nuance Communications Inc.'s pair of convertible bond issues added a bit on an outright basis early Wednesday and looked about flat on a dollar-neutral, or hedged, basis after the Burlington, Mass.-based speech-recognition software company preannounced first-quarter earnings ahead of consensus late Tuesday. Shares were up 8% or 9% in the early going.

Nuance's 2.75% convertibles due 2031, which are the newer bonds, traded up 1.17 points to 99.296, according to Trace data.

Nuance's older 2.75% convertibles due 2027, which are typically more illiquid, were also in trade and changed hands at 105.5, which was up 0.625 point, according to Trace data.

Nuance said it now expects first-quarter revenue of between $487 million and $491 million and net income of 23 cents per share to 24 cents per share. That compares to previous guidance of $477 million to $487 million and net earnings of 18 cents to 21 cents a share.

Analysts were expecting net income of 21 cents a share and revenue of $483.56 million.

Also among the most actives in trade early Wednesday were the convertibles of Cemex SAB de CV.

Cemex's 4.875% convertibles due 2015 traded at 124.9, which was up 1.5 points, according to Trace data.

Cemex's 3.75% convertibles due 2018 were up 3.7 points at 147.5, and the Cemex 3.25% convertibles due 2016 were up 2.77 points at 141.98.

Cemex shares had been as high as $13.17, which was up 2.5% on the day, but were most recently at $13.01, which was up 1.3% for Wednesday.

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