Instrumentation software developer National Instruments Corp. (NATI) on Friday slashed its fourth-quarter earnings and revenue outlook for the second time in as many months, citing a rescheduling of orders that were booked in November and which the company expected to ship in December. The company had earlier slashed its outlook for the fourth quarter in December on expectations for a slowdown in business.
For the fourth quarter, the company lowered its GAAP earnings outlook to a range of $0.23-$0.24 per share from the prior range of $0.29-$0.37 per share. The company now projects non-GAAP earnings in a range of $0.29-$0.30 per share, lower than its prior forecast in a range of $0.35-$0.43 per share. On average, eight analysts polled by First Call/Thomson Financial expect the company to report earnings for the quarter of $0.34 per share. Analysts' estimates typically exclude special items such as one-time gain or expense. The company noted that in the prior-year fourth quarter, it recognized a tax credit of $18.3 million, which had the impact of increasing its GAAP and non-GAAP earnings per share by $0.23. Excluding the credit, the company's GAAP and non-GAAP earnings per share for the year-ago quarter would have been $0.33 and $0.39 respectively.
The Austin, Texas-based National Instruments lowered its revenue outlook for the fourth quarter to $202 million from the prior range of $204 million-$218 million. Analysts have a consensus revenue estimate for the quarter of $212.17 million.
The revised revenue outlook represents a decline of 1% from the same period of the prior year and is 1% below the low-end of the guidance provided by the company in December. The outlook also anticipates single-digit revenue declines in Asia and Europe as well as single-digit revenue growth in the Americas in U.S. dollar terms for the fourth quarter of 2008 compared to the prior-year period.
The company noted that orders received in December were within the range anticipated in its business update conference call on December 4. However, the impact of the expected year-end pause in purchasing expanded to include the rescheduling of about $5 million in orders that had been booked as of November 30 and which the company had expected to ship in December. As a result, the company's December revenue fell short of its expectations announced on December 4.
James Truchard, president, co- founder and CEO of National Instruments said, "While we believe the industry experienced a significant contraction in Q4, the diversity of our business and the solid execution of our sales force allowed us to gain market share. Our virtual instrumentation and graphical system design products continued to show slight growth and the significant new products we introduced at NIWeek 2008, including 6.6 GHz RF modular instruments, wireless data acquisition, NI Single-Board RIO, and LabVIEW 8.6 had impressive sales in the quarter."
In early December, National Instruments had lowered its earnings and revenue guidance for the fourth quarter in response to the dramatic fall in the global Purchasing Managers' Index or PMI in November, and in anticipation of a significant pause in business during the last week of December as a result of plans announced by many of its customers to extend their holiday shutdowns through the end of the year.
For fiscal year 2008, the company currently expects to report revenue of about $820 million, representing an increase of 11% over the prior year. Wall Street analysts have a consensus revenue estimate for the year of $830.66 million.
Looking ahead, National Instruments said it expects the impact of the extended holiday shutdowns by many of its customers to continue well into the first quarter of 2009. Accordingly, the company expects a single-digit year-over-year decline in revenues for the first quarter.
For fiscal year 2009, the company said it intends to sustain its strategic R&D investments and continue a moderated field sales expansion. The company said that as a result, it expects operating expenses for 2009 to be significantly lower than in 2008. The company intends to provide a detailed outlook in its scheduled conference call on January 29, 2009.
In addition, the company said it has cut its spending plans for 2009. The company is currently budgeting for a 3% year-over-year increase in total operating expenses in 2009, compared to an approximately 14% increase in total operating expenses in 2008.
The company's peer Teradyne Inc. (TER) said in October that for the fourth quarter, it expects a non-GAAP loss of $0.07-$0.18 per share, and sales of $190 million-$220 million. The outlook excluded the company's then-pending acquisition of peer Eagle Test Systems. Analysts expect the company to report a loss of $0.12 per share for the quarter on revenues of $204.17 million.
In Friday's regular trading session, NATI is currently trading at $23.02, down $1.34 or 5.50% on a volume of 4,700 shares. The stock has been trading in a range of $20.25-$35.56 in the past 52 weeks.
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