Fabrinet (NYSE:FN) Issues Earnings Results

Fabrinet (NYSE:FN) issued its earnings results on Monday. The technology company reported $4.34 EPS for the quarter, beating the consensus estimate of $4.20 by $0.14, FiscalAI reports. Fabrinet had a net margin of 10.19% and a return on equity of 21.23%. The company had revenue of $1.47 billion for the quarter, compared to the consensus estimate of $1.41 billion. During the same quarter in the previous year, the company earned $2.92 EPS. The firm’s revenue for the quarter was up 50.7% compared to the same quarter last year.

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 Trading Down 4.1%

Shares of NYSE:FN opened at $313.86 on Tuesday. Fabrinet has a 12 month low of $305.63 and a 12 month high of $748.89. The firm has a 50 day moving average of $402.07 and a 200-day moving average of $521.45. The stock has a market capitalization of $11.25 billion, a PE ratio of 24.05 and a beta of 1.23.

Key Stories Impacting Fabrinet

Here are the key news stories impacting Fabrinet this week:

• Positive Sentiment: Fabrinet reported record fiscal Q1 revenue of $1.47 billion, up 50.7% year over year and above both its guidance range and analysts’ expectations of approximately $1.41 billion. Fabrinet Announces First Quarter Fiscal Year 2027 Financial Results
• Positive Sentiment: Adjusted earnings came in at $4.34 per share, exceeding consensus estimates near $4.19-$4.20 and rising from $2.92 a year earlier. The revenue and earnings “double beat” supported the initial upward reaction in the shares. Fabrinet Stock Jumps on Q1 Earnings Double Beat, Strong Guidance
• Positive Sentiment: Management forecast fiscal Q2 revenue of $1.60 billion to $1.65 billion, implying continued strong demand, while beginning construction of Building 11, which is expected to add roughly $3 billion of capacity. Fabrinet anticipates Q2 revenue of $1.6B-$1.65B while starting Building 11
• Neutral Sentiment: The rapid growth is being driven by Fabrinet’s optical manufacturing business, particularly demand tied to advanced optical products and data-center infrastructure.
• Negative Sentiment: Investors are also monitoring the cost of expansion and a new global minimum tax, which limited GAAP earnings growth relative to the 51% revenue increase and may pressure cash flow and margins. Fabrinet’s 51% Growth Comes at a Cash Cost
• Negative Sentiment: The stock recently touched a new 52-week low near $314, highlighting elevated volatility and continued sensitivity to valuation, execution and broader technology-sector sentiment. Fabrinet Drops to $314, a New 52-Week Low

Analyst Ratings Changes

A number of research firms recently issued reports on FN. B. Riley Financial cut their price target on Fabrinet from $431.00 to $385.00 and set a “neutral” rating for the company in a report on Friday. Weiss Ratings cut Fabrinet from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Wednesday, September 9th. Zacks Research upgraded Fabrinet from a “hold” rating to a “strong-buy” rating in a report on Monday, October 5th. Susquehanna lowered their target price on Fabrinet from $850.00 to $600.00 and set a “positive” rating on the stock in a research report on Wednesday, October 21st. Finally, Rosenblatt Securities dropped their price target on shares of Fabrinet from $750.00 to $600.00 and set a “buy” rating on the stock in a research report on Tuesday. One analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $607.38.

Insider Transactions at Fabrinet

In other Fabrinet news, EVP Edward Archer sold 2,500 shares of the company’s stock in a transaction dated Thursday, September 3rd. The stock was sold at an average price of $385.91, for a total value of $964,775.00. Following the completion of the transaction, the executive vice president owned 7,007 shares of the company’s stock, valued at $2,704,071.37. This represents a 26.30% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.22% of the stock is currently owned by insiders.

About Fabrinet

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.