The 10-second takeaway
For the quarter ended March 30 (Q3), Fabrinet beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share dropped to a loss.
Margins contracted across the board.
Fabrinet notched revenue of $139.0 million. The four analysts polled by S&P Capital IQ expected sales of $134.6 million on the same basis. GAAP reported sales were 29% lower than the prior-year quarter's $194.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.28. The four earnings estimates compiled by S&P Capital IQ averaged $0.24 per share. GAAP EPS were -$1.35 for Q3 compared to $0.49 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 10.7%, 230 basis points worse than the prior-year quarter. Operating margin was 6.0%, 330 basis points worse than the prior-year quarter. Net margin was -33.3%, 4,190 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $163.6 million. On the bottom line, the average EPS estimate is $0.32.
Next year's average estimate for revenue is $580.2 million. The average EPS estimate is $1.17.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 23 members rating the stock outperform and four members rating it underperform. Among eight CAPS All-Star picks (recommendations by the highest-ranked CAPS members), five give Fabrinet a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fabrinet is outperform, with an average price target of $22.75.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.