National Instruments Profit Falls, Issues Weak Q3 Revenue Outlook, Shares Fall

(RTTNews) - National Instruments (NATI), a manufacturer of tools to engineers and scientists, Monday said its second-quarter profit fell sharply from the previous year, as revenue grew only marginally and expenses increased, amid general industry weakness. The firm guided third-quarter revenue below Wall Street expectations. The stock fell nearly 10 percent in after-market trading.

Net income decreased to $14.42 million or $0.12 per share from $26.44 million or $0.22 per share reported last year.

Excluding stock-based compensation, amortization of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments and acquisition-related transaction costs, adjusted net income was $0.18 per share for the quarter. In the previous year, adjusted earnings were $0.27 per share.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.

Total net sales rose to $296.13 million from $292.26 million last year. Analysts expected revenue of $308.71 million for the quarter.

Geographically, revenue in U.S. dollar terms slid 1 percent in the Americas and dropped 15 percent in Emerging Markets, while it grew 2 percent in Europe and 10 percent in East Asia.

Dr. James Truchard, CEO, said, ''Although the test and measurement industry had a challenging quarter, we were able to grow revenue while executing disciplined cost management...we have seen accelerated growth in customer leads and opportunities for our strategic product platforms oriented around LabVIEW despite the fact that customer budgets are tight."

The company said its gross margin decreased to 72 percent amid lower factory utilization and the significantly lower margin on the company's first RF test application with its largest customer. Operating expenses increased to $193.19 million from $186.54 million. Looking ahead, the company said it continues to be conservative in planning for the third quarter due to the weak industry conditions. For the quarter, the company sees earnings per share in the range of $0.04 to $0.16, with non-GAAP earnings per share in the range of $0.10 to $0.22.

Revenue is estimated to be between $265 million and $295 million, a decrease of 3 percent year-over-year at the midpoint of guidance.

Analysts expect the company to report third-quarter earnings per share of $0.17 on revenue of $309.13 million.

NATI, which closed up 0.8 percent on Monday, plunged 9.9 percent in after-market trading.