Why Fabrinet stock is up nearly 16% today

Supplier of optical equipment Factory (FN 15.74%) was quite a double-digit performer on the second trading day of the week. The company’s stock price soared nearly 16% on Tuesday, thanks to an earnings report that far beat expectations. The performance of Fabrinet shares that day was particularly impressive given that S&P 500 the index ended in negative territory, ending the day down 0.2%.

A good way to ring in the new fiscal year

Fabrinet ended its 2024 fiscal year in style, delivering fourth-quarter results that easily beat analysts’ average estimates. For the period ended June 28, it had revenue of more than $753 million, a figure that was up 15% year over year. Non-GAAP (adjusted) net income rose even more, rising 29% to $88 million, or $2.41 per share.

Analysts tracking the stock, on average, had expected a significantly weaker performance. Collectively, they were modeling less than $733 million on the top line and just $2.24 per share for adjusted net income.

In its earnings release, Fabrinet did not fail to mention that the quarter was the fourth straight frame in which it posted record revenue and earnings per share numbers.

Fabrinet also said its board approved expanding the company’s existing share buyback program. The new authorization is for $139.5 million of its common stock, bringing the total amount authorized to $434.3 million. Of that figure, $200 million remains for buybacks.

Crushing it on the guidelines as well

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