Why Fabrinet Shares Dropped

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What: Shares of Fabrinet (NYS: FN) have dropped by as much as 10% after the company reported third-quarter earnings.

So what: Revenue in the third quarter fell 29% to $139 million, which led to adjusted net income of $9.9 million, or $0.28 per share. On a GAAP basis, Fabrinet posted a net loss of $46.3 million, or $1.35 per share. The majority of that loss is related to the recent floods that hit Thailand last year.


Now what: The company incurred $55.6 million in expenses related to the flood during the quarter, bringing its total flood-related costs over the past nine months to $95.9 million. CEO Tom Mitchell said the company remains on a "strong recovery path," and that it continues to win new business. Looking forward, fourth-quarter guidance calls for revenue between $139 million and $143 million, with adjusted earnings per share in the range of $0.25-$0.27.

Interested in more info on Fabrinet? Add it to your watchlist byclicking here.

At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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