Fabrinet Goes Red

Seth Jayson, The Motley Fool
Updated

Fabrinet (NYS: FN) reported earnings Feb. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 30 (Q2), Fabrinet beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share dropped to a loss.

Margins shrank across the board.

Revenue details
Fabrinet reported revenue of $186.3 million. The three analysts polled by S&P Capital IQ expected to see revenue of $177.5 million. Sales were 48% lower than the prior-year quarter's $173.7 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.45. The four earnings estimates compiled by S&P Capital IQ averaged $0.42 per share on the same basis. GAAP EPS were -$0.96 for Q1 against $0.46 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 9.2%, 360 basis points worse than the prior-year quarter. Operating margin was -37.9%, 4,750 basis points worse than the prior-year quarter. Net margin was -34.4%, 4,300 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $76.7 million. On the bottom line, the average EPS estimate is -$0.42.

Next year's average estimate for revenue is $557.6 million. The average EPS estimate is $0.33.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 23 members rating the stock outperform and three members rating it underperform. Among seven CAPS All-Star picks (recommendations by the highest-ranked CAPS members), four 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 hold, with an average price target of $18.38.

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At the time thisarticle was published 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 ofMotley 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.

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