Fabrinet (NYSE:FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, stock fell 9.44% (As on February 4, 11:47:33 AM UTC-4, Source: Google Finance) though the company beat-and-raise performance in the second quarter of fiscal 2025. Non-GAAP net income for the second quarter of fiscal year 2025 was $95.1 million, compared to $76.1 million for the second quarter of fiscal year 2024. The telecom performance was very strong and benefited from both increasing demand for datacenter interconnect products as well as early progress from recent systems wins. While datacom demand has slightly moderated near-term the company continues to anticipate more rapid growth as next-generation products ramp production. The company has long-lasting customer relationships with programs extending from new product introduction (NPI) to volume production. The company has highly seasoned management team with extensive and diversified manufacturing experience in OEM and EMS industries

FN in the second quarter of FY 25 has reported the adjusted earnings per share of $2.61, beating the analysts’ estimates for the adjusted earnings per share of $2.50. The company had reported the adjusted revenue growth of 17 percent to $833.6 million in the second quarter of FY 25, beating the analysts’ estimates for revenue of $813.86 million. Q2 non-GAAP operating margin was 10.6%

Additionally, the company has approved an expansion of its share repurchase program, authorizing the repurchase of up to an additional $100.0 million of Fabrinet’s ordinary shares. The addition brings the aggregate authorization under Fabrinet’s existing share repurchase program to $534.3 million.

For the third quarter, Fabrinet expects adjusted EPS between $2.55 and $2.63, ahead of the $2.55 analyst estimate. It also projects revenue in the range of $850 million to $870 million, surpassing the $825 million forecast. The company remains optimistic about its growth prospects, particularly in datacom as next-generation products commence production.

On the other hand, “Even with Datacom not expected to rebound in F3Q, guidance impressed on expected continued strength in Telecom, benefiting from both share gains and strong momentum in 400ZR products,” Needham analysts led by Ryan Koontz commented in a post earnings note. “Management confidence in sustained growth was evident with its recent ground breaking for its massive building 10 capacity expansion,” they added. Needham hiked its Fabrinet estimates for the fiscal 2025 and 2026 years, while maintaining a Buy rating and a price target of $280.