Why Fabrinet shares are up almost 16% today

Optical equipment supplier Factory (Note 15.74%) was a pretty double-digit outperformer on the second trading day of the week. The company’s stock price surged almost 16% on Tuesday, thanks to an earnings report that far exceeded expectations. Fabrinet’s stock performance on the day was particularly impressive, given that S&P500 The index ended the day in the red, down 0.2%.

A good way to start the new fiscal year

Fabrinet closed out fiscal 2024 in style, delivering fourth-quarter results that easily beat analysts’ average estimates. The company posted more than $753 million in revenue for the period ended June 28, up 15% year over year. Non-GAAP (adjusted) net income rose even more, rising 29% to $88 million, or $2.41 per share.

Analysts following the stock, on average, were expecting much more modest results. They modeled less than $733 million in total top line earnings and just $2.24 per share in adjusted net income.

In its financial results announcement, Fabrinet did not fail to mention that this quarter was the fourth consecutive one in which it recorded record revenues and earnings per share.

Fabrinet also announced that its board of directors has approved an expansion of the company’s existing share repurchase program. The new authorization covers $139.5 million of common shares, for a total authorization of $434.3 million. Of this amount, $200 million remains for repurchase.

Breaking it down in terms of tips as well

Fabrinet also provided guidance for the current (first) quarter. The company forecasts revenue of $760 million to $780 million, with adjusted net income of $2.33 to $2.40 per share. As with the fourth-quarter results, these ranges beat analysts’ consensus estimates of nearly $752 million in top line and $2.25 in adjusted earnings per share.