06-24-2017, 01:31 PM
The earnings report was released in the midst of reports from other optical communications companies with results varying wildly. Oclaro (NASDAQ:OCLR) dropped big post-earnings only to rapidly bounce back this week, Acacia Communications (NASDAQ:ACIA) dropped double-digits due to a massive cut to revenue guidance, and Lumentum (NASDAQ:LITE), Fabrinet's largest customer, jumped nearly 20% post-earnings.
Fabrinet: The Roller Coaster Continues - Fabrinet (NYSE:FN) | Seeking Alpha
The ongoing investments in capital expenditures are minimizing current free cash flow generation, but management is projecting for capex spending to be cut in half going forward now that construction on the new facility in Thailand is winding down. This will help boost cash flows and will allow Fabrinet to grow operations further or return capital directly to shareholders.
Fabrinet: The Roller Coaster Continues - Fabrinet (NYSE:FN) | Seeking Alpha
Datacom currently makes up 40% of the optical communications pie next to 60% for telecom, the former of which will see declines this quarter due to the China slowdown while the latter will continue to grow due to less Chinese exposure. On the conference call, CFO TS Ng stated that the company as a whole earns about 10% of revenues from China, which is much lower than other companies in the industry and should allow it to avoid any significant declines in revenue or profit even in the short term.
Fabrinet: The Roller Coaster Continues - Fabrinet (NYSE:FN) | Seeking Alpha