Benzinga Pro data showed Fabrinet shares gaining 11.28% to $350.20 in Tuesday premarket trading after Monday's fiscal first-quarter results and second-quarter forecast. Fabrinet reported first-quarter revenue of $1,474 million, about 51% higher year over year and above Wall Street's $1,403 million estimate. Adjusted earnings increased to $4.34 per share, exceeding analysts' $4.19 estimate. Fabrinet recorded a non-GAAP gross margin of 12.1%. Operating margin stood at 10.8%. Fabrinet extended revenue growth to 14 consecutive quarters. Revenue growth accelerated for a seventh consecutive quarter.
Fabrinet's board approved another $103 million for share repurchases, increasing the program's total authorization to $637.3 million. Fabrinet said the program still has $200 million available.
Data center revenue reached $777 million, increasing 78% year over year and 16% from the preceding quarter. Data center sales represented 53% of total revenue. Demand for optical transceivers, data center interconnects and high-performance computing products drove the growth. Communications infrastructure revenue increased 35% year over year to $444 million because of demand for telecom components and satellite communications. Automotive, industrial and other markets generated $253 million in revenue, an increase of 20%. Laser demand and new manufacturing customers contributed to that growth.
Fabrinet expects demand from data center customers to sustain growth through fiscal 2027. Fabrinet is increasing optical transceiver production for hyperscale data centers. Fabrinet is also adding capacity for optical circuit switches and MultiRail systems. Several transceiver manufacturers are expanding production with Fabrinet, offering opportunities for more revenue. Fabrinet expects near-packaged optics programs to start producing revenue during fiscal 2027's second half. Co-packaged optics opportunities are expected to require more time. Management believes both technologies will supplement existing pluggable optical products instead of replacing those products. Fabrinet said sufficient supplies have been secured to satisfy customer demand despite component shortages across the industry.
Fabrinet is enlarging manufacturing operations to meet increasing demand. The Santa Clara facility will provide an additional $300 million of annual revenue capacity. The Nava 1 campus will provide another $400 million of capacity. Building 10 at Fabrinet's Chonburi campus in Thailand covers about 2 million square feet and will provide $3.5 billion of additional capacity. Initial production has started at Building 10, and completion is expected in January. Fabrinet expects annual revenue capacity to increase from $5.8 billion at fiscal 2026 year-end to about $10 billion by early January. Another planned facility is expected to provide $3 billion of additional capacity and start operating around mid-2028. Fabrinet projects total capacity of $16 billion including a potential Building 12, compared with the previous $14 billion estimate.
Fabrinet forecast second-quarter adjusted earnings between $4.77 and $4.92 per share, exceeding Wall Street's $4.41 estimate. Fabrinet projected revenue between $1.6 billion and $1.65 billion, above the consensus estimate of $1.48 billion. Management expects sustained data center demand, product introductions and margin improvements to support growth. Fabrinet plans higher capital spending in fiscal 2027 to expand manufacturing capacity.
Fabrinet Shares Rise on Strong Q1 Results and Growth Outlook
BenzingaShare
Summary
Fabrinet (NYSE:FN) shares jumped 11.28% in premarket trading after Q1 results beat estimates and on-chain data signaled strong investor confidence. Revenue hit $1,474 million, up 51% year-over-year, with adjusted earnings at $4.34 per share. The company also announced a $103 million share buyback and expects data center demand to remain robust through 2027. With the fear and greed index showing a shift toward optimism, traders are closely watching Fabrinet’s next moves.
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