FEI Company (NASDAQ:FEIC)  reported third-quarter revenue of $227.8 million and non-GAAP earnings of $0.69 per share after the closing bell today. While revenue missed the low end of the company's guidance, earnings per share were right near the top of its guidance range. Let's take a closer look.

Putting the numbers under the microscope
FEI's third-quarter sales of $227.8 million were up 4.2% over last year's Q3, but they slipped 3.9% from just last quarter and missed the low end of the company's own guidance of $228 million to $243 million. However, foreign exchange rates negatively affected sales by about $2.7 million, compared with the rates just last quarter. So while the reported number might have been a bit of a disappointment, a closer look shows that sales were at least still solid.

Further, what the company missed on sales, it made up with stronger margins. Gross margin rose to 47.7%, which is a solid improvement from last quarter's 46.4% and marked the highest level since the third quarter of last year. Clearly, the company's focus on margin improvement is yielding results, as the higher margin pushed GAAP earnings up to $0.51 per share, well ahead of the company's guidance range of $0.35 to $0.45 per share. Further, non-GAAP earnings hit $0.69 per share, which was at the high end of the guidance range of $0.60-$0.70 per share.

The other important number FEI reported this quarter was net bookings, which are contracts for future sales. Net bookings came in at $250.1 million and resulted in a book-to-bill ratio of 1.1-to-1. That's a good sign, as a book-to-bill ratio over 1 signifies that the company received more orders than it filled, which points to strong demand.

Bookings would have been even stronger if not for the impact of foreign exchange rates. Factoring those out, FEI would have reported net booking of $269.5 million, which would have been an all-time record for the company.

A look ahead
To see the evidence of a strong demand for FEI's products, look no further than the Q4 forecast, when the company expects to deliver even stronger results. FEI expects revenue to be in the range of $265 million to $280 million and sees profitability improving as it works toward its goal of 50% gross margin and 20% operating income by the middle of next year. As it makes it way down that path, it expects solid profit growth next quarter, with GAAP earnings of $0.80-$0.94 per share and non-GAAP earnings of $0.94-$1.08 per share.

Investor takeaway
Overall, FEI delivered a pretty solid quarter. While its revenue was a bit light, profitability was strong. On top of that were strong net bookings, which is why the company is projecting even better sales and profits next quarter.

Matt DiLallo owns shares of FEI. The Motley Fool recommends FEI. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.