Fabrinet (FN, Financial) is a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, industrial lasers and sensors. Fabrinet focuses on production of high complexity products in any mix and volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the U.S. and the People's Republic of China.
The company recently reported strong second-quarter results. It boasts of record revenue and strong profitability. Second-quarter revenue beat the high end of guidance by 5%.
Second-quarter results
Revenue was $233.0 million for the second quarter of fiscal year 2016 (an increase of 24% from $188.4 million during the prior-year quarter).
GAAP net income for the second quarter of fiscal year 2016 was $19.8 million ($8.7 million during the prior-year quarter).
GAAP net income per diluted share for the second quarter of fiscal year 2016 was 54 cents (24 cents in the in the prior-year quarter).
Non-GAAP net income in the second quarter of fiscal 2016 was $18.2 million (an increase of 26% from non-GAAP net income of $14.4 million during the prior-year quarter).
Non-GAAP net income per diluted share in the second quarter of fiscal 2016 was 50 cents (an increase from non-GAAP net income per diluted share of 40 cents in the prior-year quarter).
Expectations for third quarter
| Â | Range |
| Revenue | To be between $240 million and $244 million. |
| GAAP net income per diluted share | To range between 47 cents and 49 cents. |
| Non-GAAP net income per diluted share | To be between 52 cents and 54 cents. |
Competitive strengths
- Differentiated services to the optical communications.
- Strategic alignment with customers.
- Advanced optical and electro-mechanical manufacturing technologies.
- Efficient, flexible and low-cost process engineering and manufacturing platform.
- Track record of profitability.
Focus at the moment
- Strengthen presence in the optical communications market.
- Diversify the end markets.
- Continue to extend customized optics and glass vertical integration.
- Expand through acquisitions.
- Broaden client base geographically.
- Continuous improvement and optimization.
On a concluding note
The company is a leader in manufacturing products for the optical communications market. The optical communications market is growing rapidly, driven by the growth in demand for increased network bandwidth. This trend is expected to continue to increase the demand for the products that this company manufactures. It continues to invest resources in advanced manufacturing process and optical packaging technologies to support the manufacture of the next generation of complex optical products.
It has a seasoned management team with over 100 years of combined manufacturing experience. The company is playing well as of now, and I would recommend this company as a buy.
Disclosure: I do not hold any position in the company.
