Fabrinet Surges 13% After Forecasting Strong First-Quarter Results

Shares of tech manufacturer Fabrinet (FN) soared 13% in after-hours trading on Monday following the company’s impressive forecast for the first quarter. The strong results were driven by the success of their new AI products and data-communications sales during the previous quarter.

Forecasted Sales Exceed Expectations

Fabrinet, which specializes in providing high-tech manufacturing services to companies producing complex equipment such as optical communication components and industrial lasers, anticipates first-quarter sales between $650 million and $670 million. This forecast exceeds the $657 million projection by FactSet, a leading financial data provider.

Earnings per Share Outlook

In addition to robust sales projections, Fabrinet expects to report adjusted earnings per share of $1.83 to $1.90 for the first quarter. This is slightly higher than the FactSet estimate of $1.86.

Fourth Quarter Performance

Fabrinet’s fourth-quarter results showcase its resilience and growth potential. The company reported net income of $60.8 million, or $1.65 per share, compared to $56.2 million, or $1.51 per share, during the same period last year. This positive momentum is reflected in the revenue increase from $587.9 million to $655.9 million year over year. The adjusted earnings per share for the fourth quarter came in at $1.86, surpassing FactSet’s expected figure of $1.80 based on sales of $641 million.

Datacom Revenue Boost

Fabrinet’s Chief Executive, Seamus Grady, attributed the remarkable revenue growth during the quarter to the strong performance of their data-communications segment, driven by the successful launch of new AI products. This impressive growth overshadowed any potential setbacks caused by inventory adjustments at certain client companies. Grady expressed optimism about the upcoming fiscal year and believes that new datacom programs will offset any inventory absorption challenges in the industry, contributing to the company’s continued success.

Fabrinet is well-positioned to extend its track record of strong execution as it moves into the first quarter of fiscal 2024. With their innovative product lineup and focus on datacom programs, Fabrinet is confident in its ability to surpass expectations and maintain its growth trajectory.