What happened

After the company reported second-quarter results that missed the mark, shares of National Instruments (NASDAQ:NATI), a provider of software and systems used by engineers and scientists, dropped 10% as of 11:25 a.m. EST on Wednesday.

So what

Here are the key takeaways from the earnings report:

  • Revenue dropped 2% to $334 million -- short of the $339.6 million that Wall Street had expected.
  • Operating expenses dropped 2% to $218 million.
  • Net income declined 8% to $29 million. 
  • Non-GAAP (adjusted) net income was up 3% to $46 million.
  • Non-GAAP EPS was $0.35, which was a penny lower than the consensus estimate.
  • 1.1 million shares of the stock were repurchased during the quarter.
Two engineers looking at computer software

Image source: Getty Images.

Turning to guidance, here's what National Instruments expects in the upcoming quarter:

  • Revenue will land between $325 million and $355 million. Wall Street is currently forecasting $352.7 million, so the midpoint of this range is well below the estimate.
  • EPS under generally accepted accounting principles is expected to land between $0.30 and $0.44. 
  • Non-GAAP EPS is expected to be in the range of $0.36 to $0.50. The midpoint of this range is much higher than the $0.32 that Wall Street was looking for.

Traders are overlooking the upbeat non-GAAP EPS forecast and are focused on the worse-than-expected quarterly numbers.

Now what

CEO Alex Davern did his best to stay positive with his commentary and to remind investors that the long-term story remains intact: "We are on a journey to position NI for long-term growth, and I believe we have an opportunity to deliver significant operating leverage when the market dynamics recover. I remain optimistic about our opportunity for growth and delivering 18 percent non-GAAP operating margin through the cycle."

With shares currently trading near their 52-week low, traders don't appear to be willing to wait for the market to turn.