This electronics manufacturer beat Wall Street’s earnings estimates by $0.09 last quarter, and five analysts have raised their EPS forecasts in the past 30 days.
A leading provider of electronic manufacturing services, Fabrinet (FN) serves customers from such fast-growing markets as biotechnology, communications, and medical devices. The company, with factories in the U.S., Thailand, China, and the U.K., focuses on high-complexity products.
In fiscal 2018 ended June, optical communications gear accounted for 73% of sales. Fabrinet earns an Overall score of 93, versus an average of 53 for the 16 stocks in its industry group. The Earnings Estimates score is an impressive 98. In the September quarter, Fabrinet earned $0.92 per share, up 23% and $0.11 above the consensus. Revenue advanced 6% and topped expectations.
Fabrinet’s quarterly growth is often choppy, reflecting component availability, a somewhat concentrated customer base, and lumpy order flow. But the company’s strong market position and ability to adapt give us confidence it will deliver solid growth. For fiscal 2019 ending June, Wall Street expects per-share earnings of $3.63, up 22%.
Fabrinet is being initiated as a Buy.
Richard J. Moroney, CFA, Upside, www.upsidestocks.com, 800-233-5922, December 3, 2018