The market wasn't seeing great value in optical equipment specialist Fabrinet (FN -7.13%) on Tuesday. Some investors traded out of the stock aggressively on the back of the company's latest quarterly earnings release. The shares lost more than 7% of their value on a day when the damage to the S&P 500 index was limited to a 0.8% slump.

Slight profitability improvement

For its fiscal third quarter of 2025, Fabrinet's revenue rose by 19% year over year to $871.8 million. That was more than good enough to top not only the company's own guidance, but the average $858.3 million consensus analyst estimate.

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The story was a bit different on the bottom line, where under GAAP standards Fabrinet's net income only improved marginally over that one-year stretch, landing at $81.3 million. In non-GAAP (adjusted), per-share terms that profitability was $2.52, missing the average analyst projection of $2.54.

In its earnings release, Fabrinet quoted CEO Seamus Grady as saying that the company "delivered another strong telecom performance with growth that more than offset an anticipated sequential decline in datacom revenue."

Guidance meets or exceeds analyst estimates

Fabrinet proffered guidance for its current (fourth) quarter, forecasting that it will book revenue of $860 million to $900 million, which would mean at least 14% growth year over year. Adjusted net income should land at $2.55 to $2.70, comparing favorably to fourth quarter 2024's $2.41.

The consensus analyst estimate for revenue is $885.8 million, which is within the company's guidance. The average pundit projection for profitability, $2.54, is below it.