Image: National Instruments.

Scientific professionals need to be able to test their work to ensure that it will pass muster, and National Instruments (NASDAQ:NATI) has specialized in providing the diagnostic tools and testing equipment that they need in order to make vital discoveries. Yet the reliance on the health of the engineering and technical industries leaves National Instruments exposed to cyclical challenges, and coming into Thursday's fourth-quarter financial report, shareholders expected declines in revenue and net income. For its part, National Instruments managed to boost its sales from year-ago levels, but it will have to work harder to get its earnings growth up to snuff. Let's take a closer look at National Instruments to see how it did and what's ahead for the company.

How National Instruments fared
National Instruments posted mixed results in its core financials. Revenue hit a new record of $334 million, up 0.5% from the fourth quarter of 2014 and well above the $331 million consensus forecast among investors. Net income of $32.1 million was down by about a quarter from last year's levels, and that produced earnings of $0.25 per share, down from $0.34 per share in the year-ago period. Even after adjusting for one-time items, adjusted earnings of $0.34 per share was down 15%.

National Instruments' segment results were relatively uniform in a change from past quarters. The core product-sales segment saw sales gains of 0.4%, in line with the company's overall results. Software maintenance revenue rose by a faster 1.4% but made up less than a tenth of National Instruments' top line.

Yet for the first time in a long time, National Instruments got some good news on the customer front. The company's largest customer actually boosted its orders for the quarter, rising 25% to $10 million. Apart from that customer, National Instruments got more order activity from its large customers, with orders of more than $100,000 rising 9% compared to downward performance for small orders under $20,000.

Geographically, the Americas were National Instruments' weak area, with revenue falling 3% in U.S. dollar terms. Gains were substantial elsewhere in the world, with 3% gains in the Europe/Middle East/Africa segment and in the Asia-Pacific segment more than overcoming the headwinds National Instruments suffered from the rising U.S. dollar.

CEO James Truchard was comfortable with the strategic vision for National Instruments. "Our platform-based approach, built around highly differentiated software, has created a large ecosystem of customers, partners, and technologies that are key drivers to the long-term growth and profitability of the company," Truchard said.

What's ahead for National Instruments?
Data analytics promises to be a big part of National Instruments' future. In Truchard's words, "The recent convergence of technology has led to an explosion in the amount of data required to characterize systems. ... [W]e empower engineers to solve their unique challenges through our flexible tools designed specifically to measures, process, and connect to these sources of Big Analog Data."

Looking forward, National Instruments' guidance for the first quarter included revenue projections of between $290 million and $320 million, which is quite consistent with the current expectations among investors for about $306 million. Similarly, GAAP earnings of $0.09 to $0.21 per share and adjusted earnings of $0.17 to $0.29 per share didn't carry any big surprises for investors following the stock.

National Instruments didn't see its stock respond sharply to the news, which isn't that big of a shock given its relatively ordinary results. Looking forward, if National Instruments can build up some positive momentum, then 2016 could be a year of opportunity for the testing company.