Fabrinet Reports Strong Q4 Results Driven by AI Products

by Warren Seah

By Denny Jacob

Fabrinet, a provider of optical packing and electronic manufacturing services, announced impressive fourth-quarter results, driven by the success of its new artificial intelligence (AI) products. Shares of Fabrinet soared 27% to $148.77 following this news.

Record Growth and All-Time High Stock Price

Fabrinet’s stock has seen a remarkable year, with a 16% increase in value. The recent surge of 27% percent is the company’s largest percentage rise in almost 11 years, resulting in a new all-time high stock price.

Financial Highlights

For the quarter ended June 30, Fabrinet reported a net income of $60.8 million, or $1.65 per share. This marks an improvement from the prior-year period, where the company recorded a net income of $56.2 million, or $1.51 per share. Adjusted earnings were $1.86 per share, surpassing analysts’ estimates of $1.80.

Moreover, Fabrinet achieved a substantial increase in revenue, reaching $655.9 million compared to $587.9 million in the same quarter last year. The revenue figures exceeded the expectations of analysts polled by FactSet, who predicted $641.4 million.

Positive Guidance for Future Quarters

Fabrinet also provided guidance for the next quarter ending on September 29. The company forecasts revenue between $650 million and $670 million, with adjusted earnings per share ranging from $1.83 to $1.90. These estimates align with analysts’ expectations.

Chief Executive Seamus Grady expressed optimism about the future, noting that the strong growth in datacom revenue during the quarter was primarily driven by the success of new AI products. He believes that these datacom programs will continue to offset inventory absorption challenges in the industry, particularly in the first quarter.

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