Fabrinet (FN) has reported a 4.01 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $21.66 million, or $0.57 a share in the quarter, compared with $20.82 million, or $0.56 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $30.46 million, or $0.80 a share compared with $20.85 million or $0.56 a share, a year ago.

Revenue during the quarter surged 46.22 percent to $366.84 million from $250.89 million in the previous year period. Gross margin for the quarter contracted 42 basis points over the previous year period to 12.01 percent. Total expenses were 92.65 percent of quarterly revenues, up from 92.12 percent for the same period last year. That has resulted in a contraction of 53 basis points in operating margin to 7.35 percent.

Operating income for the quarter was $26.96 million, compared with $19.78 million in the previous year period.

Tom Mitchell, chief executive officer of Fabrinet, said: "We had a strong third quarter, with revenue that exceeded our guidance range and grew 46% from a year ago. We are benefiting from growth in a variety of existing customer programs that are further supported by new business. Our new facility in Chonburi, Thailand and our new product introduction facilities in Santa Clara, California and the UK are also making important contributions that we expect to expand as we look ahead."

For the fourth-quarter 2017, Fabrinet expects revenue to be in the range of $361 million to $365 million. The company projects diluted earnings per share to be in the range of $0.65 to $0.67. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.82 to $0.84.

The company has spent $81.06 million cash to meet investing activities during the nine month period as against cash outgo of $35.82 million in the last year period. It has incurred net capital expenditure of $58.94 million on net basis during the nine month period, up 74.61 percent or $25.19 million from year ago period.

Cash flow from financing activities was $17.40 million for the nine month period, up 74.92 percent or $7.45 million, when compared with the last year period.

Cash and cash equivalents stood at $136.63 million as on Mar. 31, 2017, up 6.78 percent or $8.68 million from $127.96 million on Mar. 25, 2016.

Working capital increases

Fabrinet has recorded an increase in the working capital over the last year. It stood at $458.76 million as at Mar. 31, 2017, up 22.40 percent or $83.95 million from $374.81 million on Mar. 25, 2016. Current ratio was at 2.47 as on Mar. 31, 2017, down from 2.64 on Mar. 25, 2016.

Cash conversion cycle (CCC) has decreased to 35 days for the quarter from 64 days for the last year period. Days sales outstanding went down to 49 days for the quarter compared with 58 days for the same period last year.

Days inventory outstanding has decreased to 32 days for the quarter compared with 60 days for the previous year period. At the same time, days payable outstanding went down to 46 days for the quarter from 54 for the same period last year.