What happened

Shares of Fabrinet (NYSE:FN), a leading optical product manufacturing company, jumped as much as 28% on Tuesday following the company's second-quarter earnings release. The stock is up 24% at the time of this writing.

This rise likely reflects Fabrinet's better-than-expected top- and bottom-line results. Revenue for the quarter was $337.1 million, surpassing average analyst expectations of about $330 million. Non-GAAP earnings per share landed at $0.72, compared to a consensus analyst estimate of $0.70.

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So what

Fabrinet's $337.1 million in first-quarter revenue was down from $351.2 million in the year-ago quarter. Non-GAAP EPS of $0.72 was similarly lower than its year-ago non-GAAP EPS of $0.91.

Helping support the case that investors are likely happy with Fabrinet's results, second-quarter revenue and earnings were also above management's own guidance for the quarter. This differs from last quarter, when revenue fell within its guidance range and non-GAAP earnings per share was below its forecast.

Now what

After recently meeting with customers worldwide, Fabrinet CEO Seamus Grady is optimistic, saying, "We believe that over the longer-term we remain well-positioned to drive balanced and profitable growth from our core optical communications market as well as other industries that can leverage our precision optical, electro-mechanical and electronic manufacturing reputation."

Grady's optimism for its core optical communications segment is encouraging, as it accounts for the bulk of total revenue. In Fabrinet's fiscal 2017, its core optical communications revenue represented 78% of total revenue.

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