Fabrinet (NYSE:FN) Issues Quarterly Earnings Results

Fabrinet (NYSE:FN) announced its quarterly earnings results on Monday. The technology company reported $4.34 EPS for the quarter, beating analysts’ consensus estimates of $4.19 by $0.15, FiscalAI reports. Fabrinet had a net margin of 10.19% and a return on equity of 21.23%. The firm had revenue of $1.47 billion during the quarter, compared to analysts’ expectations of $1.40 billion.

Here are the key takeaways from Fabrinet’s conference call:

• Record first-quarter results: Revenue rose 51% year over year to $1.474 billion, while non-GAAP EPS reached a record $4.34, both exceeding the company’s guidance.
• Data center demand remains the primary growth driver: Data center revenue increased 78% year over year to $777 million, with strength across interconnect, transceivers, and high-performance computing; communications infrastructure and automotive/industrial revenue also grew.
• Strong outlook and program pipeline: Fabrinet expects second-quarter revenue of $1.6 billion-$1.65 billion and non-GAAP EPS of $4.77-$4.92, supported by existing program growth and new ramps in merchant and hyperscale transceivers, optical circuit switching, multi-rail systems, NPO, and CPO.
• Capacity expansion is accelerating: Building 10 is nearing completion, a new Santa Clara site is already being leveraged, and Building 11 will add approximately 1.5 million square feet and about $3 billion in revenue capacity.
• Expansion is consuming substantial cash: First-quarter capital expenditures were $159 million, free cash flow was negative $137 million, and management expects additional spending for Building 11 and further capacity; tax expense may also remain volatile because Thailand’s Pillar Two offsetting credits have not yet been implemented.

Fabrinet Price Performance

Shares of FN traded down $13.44 during trading hours on Monday, hitting $313.86. 1,488,806 shares of the stock were exchanged, compared to its average volume of 862,683. Fabrinet has a fifty-two week low of $305.63 and a fifty-two week high of $748.89. The business has a 50-day moving average of $402.07 and a 200-day moving average of $521.45. The firm has a market capitalization of $11.25 billion, a P/E ratio of 24.05 and a beta of 1.35.

Insider Transactions at Fabrinet

In other Fabrinet news, EVP Edward Archer sold 2,500 shares of the stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $385.91, for a total transaction of $964,775.00. Following the completion of the sale, the executive vice president directly owned 7,007 shares in the company, valued at approximately $2,704,071.37. This trade represents a 26.30% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through this link. 0.22% of the stock is currently owned by insiders.

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the company. Needham & Company LLC reduced their price target on Fabrinet from $650.00 to $500.00 and set a “buy” rating on the stock in a report on Tuesday, October 27th. Wall Street Zen lowered shares of Fabrinet from a “buy” rating to a “hold” rating in a report on Monday, July 20th. B. Riley Financial decreased their price target on shares of Fabrinet from $431.00 to $385.00 and set a “neutral” rating for the company in a research report on Friday. Susquehanna dropped their price target on shares of Fabrinet from $850.00 to $600.00 and set a “positive” rating for the company in a research note on Wednesday, October 21st. Finally, Zacks Research upgraded shares of Fabrinet from a “hold” rating to a “strong-buy” rating in a report on Monday, October 5th. One investment analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and three have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of $626.12.

Fabrinet Company Profile

Fabrinet (NYSE: FN) is a provider of outsourced manufacturing services for complex optical, electronic and electromechanical products. The company works with original equipment manufacturers and other technology companies to design, manufacture, assemble, test and distribute products used in optical communications, industrial lasers, automotive applications, medical devices and other advanced technology markets.

Its capabilities include precision optical packaging, optical and electronic assembly, printed circuit board assembly, electromechanical manufacturing, engineering support, supply-chain management and testing.