We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Fabrinet (FN) Q4 Earnings Top Estimates, Revenues Up Y/Y
Read MoreHide Full Article
Fabrinet (FN - Free Report) reported earnings of $2.41 per share in fourth-quarter fiscal 2024, beating the Zacks Consensus Estimate by 7.11%. The figure increased 29.6% year over year.
Revenues of $753.3 million increased 15% on a year-over-year basis and 3% from the previous quarter’s tally, surpassing the consensus mark by 2.55%. The upside was primarily driven by the significant increase in datacom revenues, which rose more than 120% during the year.
Quarter in Details
Optical Communications, as a percentage of revenues, was 79% compared with 77% in the year-ago quarter. Datacom contributed 53% to total optical communications revenues, while Telecom contributed 47%.
The datacom segment was a significant driver of revenue growth, particularly products related to 800 gig (and faster) technologies. Datacom revenues surged 63% year over year to $350 million, contributing 53% to total optical communications revenues. The high demand for 800 gig products, especially those used in AI and related applications, was a key contributor.
While telecom revenues declined more than 20% year over year due to ongoing inventory digestion in the industry, the downtick in the fourth quarter was more modest than anticipated. Telecom revenues stood at $282 million, benefiting from data center interconnect products and contributions from new telecom system program wins.
Non-Optical Communications, as a percentage of revenues, was 21% compared with 23% in the year-ago quarter.
The non-optical communications segment saw healthy growth, with revenues increasing 12% sequentially to $157 million. Automotive revenues, in particular, rebounded strongly. The metric rose 17% sequentially as the company moved past a short-term inventory correction period.
In fourth-quarter fiscal 2024, gross margin contracted 30 basis points (bps) year over year to 12.5%.
The operating margin expanded 20 bps on a year-over-year basis to 10.7%.
Balance Sheet
As of Jun 28, 2024, cash and cash equivalent and short-term investments were $858.6 million compared with $794 million as of Mar 29, 2024.
The company’s cash flow from operations in the fourth quarter came in at 83.06 $million compared with $100.8 million in third-quarter fiscal 2024.
FN posted a non-GAAP free cash flow of $70.3 million compared with $87.2 million reported in the previous quarter.
The company repurchased approximately 21,000 shares in the fourth quarter and authorized an additional $139 million for repurchases, doubling the size of its repurchase authorization.
Guidance
For first-quarter fiscal 2025, FN expects revenues to be between $760 million and $780 million. Non-GAAP earnings are expected between $2.33 and $2.40 per share.
Zacks Rank & Stocks to Consider
Currently, Fabrinet has a Zacks Rank #4 (Sell).
The company’s shares have surged 21.7% year to date against the Zacks Computer & Technology sector’s rise of 20.8%.
Here are some top-ranked stocks worth considering in the broader sector.
ADOBE (ADBE - Free Report) , Dell Technologies (DELL - Free Report) and nCino (NCNO - Free Report) are some other top-ranked stocks that investors can consider in the broader sector.
Image: Bigstock
Fabrinet (FN) Q4 Earnings Top Estimates, Revenues Up Y/Y
Fabrinet (FN - Free Report) reported earnings of $2.41 per share in fourth-quarter fiscal 2024, beating the Zacks Consensus Estimate by 7.11%. The figure increased 29.6% year over year.
Revenues of $753.3 million increased 15% on a year-over-year basis and 3% from the previous quarter’s tally, surpassing the consensus mark by 2.55%. The upside was primarily driven by the significant increase in datacom revenues, which rose more than 120% during the year.
Quarter in Details
Optical Communications, as a percentage of revenues, was 79% compared with 77% in the year-ago quarter. Datacom contributed 53% to total optical communications revenues, while Telecom contributed 47%.
The datacom segment was a significant driver of revenue growth, particularly products related to 800 gig (and faster) technologies. Datacom revenues surged 63% year over year to $350 million, contributing 53% to total optical communications revenues. The high demand for 800 gig products, especially those used in AI and related applications, was a key contributor.
Fabrinet Price, Consensus and EPS Surprise
Fabrinet price-consensus-eps-surprise-chart | Fabrinet Quote
While telecom revenues declined more than 20% year over year due to ongoing inventory digestion in the industry, the downtick in the fourth quarter was more modest than anticipated. Telecom revenues stood at $282 million, benefiting from data center interconnect products and contributions from new telecom system program wins.
Non-Optical Communications, as a percentage of revenues, was 21% compared with 23% in the year-ago quarter.
The non-optical communications segment saw healthy growth, with revenues increasing 12% sequentially to $157 million. Automotive revenues, in particular, rebounded strongly. The metric rose 17% sequentially as the company moved past a short-term inventory correction period.
In fourth-quarter fiscal 2024, gross margin contracted 30 basis points (bps) year over year to 12.5%.
The operating margin expanded 20 bps on a year-over-year basis to 10.7%.
Balance Sheet
As of Jun 28, 2024, cash and cash equivalent and short-term investments were $858.6 million compared with $794 million as of Mar 29, 2024.
The company’s cash flow from operations in the fourth quarter came in at 83.06 $million compared with $100.8 million in third-quarter fiscal 2024.
FN posted a non-GAAP free cash flow of $70.3 million compared with $87.2 million reported in the previous quarter.
The company repurchased approximately 21,000 shares in the fourth quarter and authorized an additional $139 million for repurchases, doubling the size of its repurchase authorization.
Guidance
For first-quarter fiscal 2025, FN expects revenues to be between $760 million and $780 million. Non-GAAP earnings are expected between $2.33 and $2.40 per share.
Zacks Rank & Stocks to Consider
Currently, Fabrinet has a Zacks Rank #4 (Sell).
The company’s shares have surged 21.7% year to date against the Zacks Computer & Technology sector’s rise of 20.8%.
Here are some top-ranked stocks worth considering in the broader sector.
ADOBE (ADBE - Free Report) , Dell Technologies (DELL - Free Report) and nCino (NCNO - Free Report) are some other top-ranked stocks that investors can consider in the broader sector.
ADOBE and Dell Technologies carry a Zacks Rank 2 (Buy) at present, whereas nCino sports a Zacks Rank 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Adobe’s shares have declined 5.7% year to date. ADBE is scheduled to release third-quarter fiscal 2024 results on Sep 12.
Dell Technologies’ shares have surged 49.4% year to date. DELL is scheduled to release second-quarter fiscal 2025 results on Aug 29.
nCino’s shares have increased 17.6% year to date. NCNO is set to report second-quarter fiscal 2025 results on Aug 27.