National Instruments has reported record quarterly revenue of $184.4million in the third quarter ended 30 September 2007, up 12.4 per cent compared with Q3 2006. Diluted earnings per share (EPS) for Q3 2007 was 27 cents, which is above the midpoint of NI guidance of 24-29 cents per share. Net income was $21.5million, up 15 per cent from Q3 2006. For Q3 2007, operating margin and net margin were 13.3 per cent and 11.7 per cent, respectively.
Non-GAAP (Generally Accepted Accounting Principles) diluted EPS in Q3 2007 was 32 cents. This is above the midpoint of NI guidance of 29-34 cents per share. Non-GAAP net income was $25.8million, up 17 per cent from Q3 2006. For Q3 2007, non-GAAP operating margin and non-GAAP net margin were 16.3 per cent and 14.0 per cent, respectively. The company's non-GAAP results exclude the impact of both stock-based compensation and the amortisation of acquisition-related intangibles.
Dr James Truchard, NI president and CEO, comments: "The release of LabVIEW 8.5 in Q3 marked another major milestone in our vision of graphical system design. The inherent parallelism of LabVIEW 8.5 makes it uniquely positioned to leverage multicore processors with little to no change in the way users develop their code. I believe our graphical system design approach for test, industrial and embedded applications has defined a unique and defensible position for National Instruments."
NI virtual instrumentation and graphical system design products, which constitute the vast majority of the company's product portfolio, had 14.3 per cent year-on-year revenue growth in Q3 2007. This represents another strong quarter of revenue growth from NI virtual instrument products. NI believes this continued strong growth validates the company's strategy of increased investment in R&D to drive new product success.
In contrast, sales of NI instrument control products, which now represent less than 10 per cent of revenue, were down 3 per cent year-on-year in Q3, compared to an 8 per cent decline in Q2 2007. The decline in the company's instrument control product sales was related to weakness of the Global PMI during the quarter.
Alex Davern, NI CFO, states: "On reviewing Q3, we are particularly pleased that the success of our system-level platforms has enabled us to deliver record revenue and solid earnings growth despite a significant decline in the global PMI in Q3."
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