Fabrinet Upgraded to Strong Buy (FN) (OPLK)

Zacks

On January 2, 2013, Zacks Investment Research upgraded Fabrinet (FN) to a Zacks Rank #1 (Strong Buy). Further, this optical packaging and precision optical manufacturing company has outperformed the Zacks Consensus Estimates in the last three quarters with an average magnitude of 50.8%.

The Rank Drivers

On November 5, 2012, Fabrinet reported first quarter 2013 earnings of 33 cents per share, breezing past the Zacks Consensus Estimate by 17.9%.

However, net revenue declined 14.9% year over year to $158.6 million, primarily due to reduced customer demand for Fabrinet’s optical communications manufacturing services in fiscal 2012. In addition, the temporary suspension of production at some of Fabrinet’s facilities also led to the decline in the top line.

Fabrinet expects second quarter 2013 revenue to be in the range of $159 million to $163 million. GAAP net income per share is expected to be in the range of 32 cents to 34 cents while non-GAAP earnings are projected in the range of 35 cents to 37 cents a share.

Earnings Estimates

The Zacks Consensus Estimate for the fiscal year, ending June 2013, has increased nearly 9.9% in the past 60 days to $1.33 per share, as the sole estimate for the period was revised higher. For fiscal 2014, ending June 2014, the Zacks Consensus Estimate has remained steady at $1.48.

Competitor

One of the company’s peers, Oplink Communications Inc. (OPLK) has a Zacks Rank of #2 (Buy) after it posted a 36.8% increase in its third quarter 2012 earnings per share. Oplink’s earnings have also outperformed the Zacks Consensus Estimates in the last three quarters with an average magnitude of 126.2%.

FABRINET (FN): Free Stock Analysis Report

OPLINK COMMNCTN (OPLK): Free Stock Analysis Report

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