Fabrinet reported fourth-quarter earnings that exceeded analyst estimates on Thursday, though its shares fell more than 5% in after-hours trading as investors focused on a cautious outlook for the current quarter.
The contract manufacturer, which supplies networking and optical components to major technology firms, posted adjusted earnings per share of $1.76, above the $1.65 forecast from Refinitiv. Revenue rose 12% year-over-year to $1.45 billion, also surpassing expectations.
Despite the beat, the company guided first-quarter revenue to between $1.25 billion and $1.35 billion, below the $1.41 billion consensus estimate. Analysts cited concerns over softening demand in key end markets, including cloud and enterprise networking, as a potential headwind.
Fabrinet’s gross margin expanded to 13.2% from 12.1% in the same period last year, reflecting improved operational efficiency. Operating expenses increased 8% year-over-year, primarily due to higher labor and material costs.
The stock’s decline extended a broader tech selloff amid concerns over slowing IT spending and macroeconomic uncertainty. The company’s guidance suggests investors may remain cautious until demand stabilizes.
Fabrinet has been a key beneficiary of the AI infrastructure build-out, supplying optical components for data centers. However, the latest guidance indicates that growth may moderate in the near term.
