NI's LabView product. Image source: National Instruments.

For scientists, engineers, and many other professionals, National Instruments (NASDAQ:NATI) is a key resource for the testing equipment that allows them to do the critical experiments and tests they need to make new technological breakthroughs. However, as a result of its reliance on cyclical businesses engaged in innovative research, National Instruments is vulnerable to economic downturns, and both it and testing peer Teradyne (NASDAQ:TER) have seen pressure on revenue lately.

Coming into Tuesday afternoon's third-quarter financial report, National Instruments shareholders were bracing for continued headwinds from the impact of a strong dollar on its international business. Even though the testing-equipment maker's results were slightly worse than most investors had expected, National Instruments responded to a tough quarter by announcing an acquisition.

Let's look more closely at the latest from National Instruments and how its new buyout could help it going forward.

The strong dollar hits National Instruments again
As we saw last quarter, National Instruments has struggled to keep its fundamental metrics growing due in part to foreign currency effects. Revenue of $300 million was down 4% from year-ago levels and fell short of the $304 million in sales that investors had expected the company to bring in this quarter. Investors were already prepared for a significant drop in net income, but the 35% plunge in the bottom line on an adjusted basis to $30.4 million was far worse than projected, producing earnings of $0.18 per share, a penny worse than the consensus forecast and off more than 40% from year-earlier results.

National Instruments' troubles continued to center on its core product sales segment, which saw revenue decline by 5.5%. The software maintenance business, on the other hand, continued to see modest gains in sales, posting a gain of nearly 7% for the quarter. In addition, National Instruments kept experiencing a big decline in orders from its largest customer, which fell by half from 2014's third quarter to $6 million. Over the past several quarters, declines from this major customer have been responsible for a substantial portion of its overall revenue drop. NI's results were relatively consistent with what Teradyne saw in its most recent quarter, as the latter's revenue was also down nearly 3% from year-earlier levels.

Nevertheless, National Instruments still had some good news on the customer front. When you take out the impact of NI's biggest customer, big orders of more than $100,000 rose 4% from the prior year, and medium-sized orders between $20,000 and $100,000 were up 3%. By contrast, small orders fell 2%, making it clear that the company is increasingly relying on its best relationships with loyal clients.

Among National Instruments' coverage areas, both the Americas and the Asia-Pacific region posted declines in revenue, with Americas' sales falling 3% and Asia-Pacific posting a huge 14% drop. Both segments declined even in constant currency terms, but the 2% dollar-denominated gain in the region that includes Europe, India, the Middle East, and Africa was actually a 12% rise when you take out foreign currency impacts.

Although CEO James Truchard acknowledged the difficulties of the current economic environment, he remained confident that NI will make it through the rough patch. "I am confident our product pipeline, channel, and operational excellence will help drive the long-term growth and profitability of this company," Truchard said, and he pointed to the prospects from the Big Data and Internet of Things trends as key drivers of potential growth in the future.

Will the Micropross acquisition help National Instruments?
In part to drive that future growth, National Instruments announced that it would purchase French near-field communications specialist Micropross for 95 million euros. The deal will give National Instrument access to technology that will help it boost its wireless test business while also helping to produce future advances in radio-frequency and communications systems. With many devices needing to coordinate with each other in order to make the Internet of Things a reality, NI believes that the innovations it can drive from having Micropross as part of its overall business justify the cost of the acquisition.

Nevertheless, the acquisition won't have an immediate impact on National Instruments' guidance for the fourth quarter, which showed that the company expects past trends to continue. NI expects revenue for the quarter to be between $315 million and $345 million, with earnings of $0.21 to $0.33 per share. Currency impacts will take about 5 percentage points off reported revenue growth, and it expects its biggest customer to cut its order rate by another third.

National Instruments has relied on core revenue growth as a sign of its continued financial strength, but with a major acquisition, the company will need to work hard in order to demonstrate that its investment was a smart one. Otherwise, continued adverse trends could keep pushing National Instruments' revenue and net income in the wrong direction, and that won't be beneficial for the stock in the long run.