Why Fabrinet Shares Jumped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Fabrinet finished up 11% today after it flew past estimates in its quarterly report.

So what: The electro-optical supply-chain specialist posted a per-share profit of $0.55, better than estimates of $0.47, while revenue beat expectations as well, growing 8.2% to $171.6 million. CEO Tom Mitchell described the quarter as a "strong start" to the year, and said, "With our strong customer relationships and expanding pipeline of new business, I am confident that we will be able to deliver a strong year of profitable growth." Fabrinet issued guidance ahead of Wall Street expectations, eyeing sales of $170 million to $174 million for the current quarter, and adjusted EPS of $0.40-$0.42.

Now what: It's hard to argue with a report like this, beating on both top and bottom lines and providing upside guidance. With their P/E of just 9.6 and solid sales growth, I'd expect Fabrinet shares to move higher if it can deliver on its promising guidance.

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The article Why Fabrinet Shares Jumped originally appeared on Fool.com.

Fool contributor Jeremy Bowman and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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