Fabrinet forecasts another record year amid strong Q3 results By Investing.com

Fabrinet (NYSE:), a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, has announced a robust financial performance for the third quarter of fiscal year 2024. The company reported a record revenue of $731.5 million and a non-GAAP net income of $2.39 per share.

The impressive results were driven by significant growth in optical communications, especially in the datacom sector, which saw a 150% year-over-year increase. Despite a slight dip in non-optical communications revenue due to a slowdown in the automotive sector, the company projects overall revenue for the fourth quarter to be between $720 million and $740 million.

Key Takeaways

• Fabrinet reported a record revenue of $731.5 million and non-GAAP net income of $2.39 per share in Q3 of fiscal year 2024.
• Datacom revenue increased by 150% from the previous year, while telecom revenue also grew sequentially.
• Non-optical communications revenue slightly declined due to inventory digestion in the automotive sector.
• The company expects a continuous rise in datacom and a decline in telecom revenue in Q4, with overall revenue projected to be between $720 million and $740 million.
• Fabrinet remains optimistic about the demand for upcoming 800 gig and 1.6 terabyte products and the growth of optical interconnect in AI data centers.

Company Outlook

• Fabrinet anticipates continued growth in the datacom sector.
• The company is confident about meeting demand and executing effectively, with another year of record revenue and profitability expected.

Bearish Highlights

• A slight decrease in non-optical communications revenue was observed due to inventory digestion in the automotive sector.
• Telecom revenue is expected to decline in the fourth quarter.

Bullish Highlights

• Strong performance in 400ZR and ZR technology with five customer engagements.
• Growth in datacom business with a 150% year-over-year increase and a 6% quarter-over-quarter growth, excluding the phase-out of the 100 gig product.
• No cannibalization of demand with products and an anticipated continuation in the growth of optical interconnect in AI data centers.

Misses

• There were no significant misses reported in the earnings call.

Q&A Highlights

• Fabrinet expressed readiness for future growth, outlining demand, capacity, and execution as key…