MACAO -- Top 15 EMS provider Nam Tai Electronics today reported second-quarter net income rose 110% to $38.8 million despite a 7.4% drop in sales.

For the period ended June 30, the company reported revenues of $197.8 million, down from $213.7 million a year ago. Gross margins were up nearly two points to 11.5%.
The company benefited from a one-time gain; without it, the net profit would have been $8.6 million.

The sales drop was due to a softness in telecommunications demand brought on by a "substantial drop" in sales of mobile devices in Asia and Europe from an indirect customer, Nam Tai said.

Sequentially, revenue improved about 3% from the first quarter mainly on growth in LCD products, consumer electronics and communication products.

For the quarter, net cash from operations was $28.7 million, and the company ended the quarter with $268.3 million cash on hand. Capital expenditures were $5.7 million.

In a statement, Nam Tai said, "We are working hard to stabilize our results by improving efficiencies, broadening our product offerings and diversifying our customer base. Recent customer wins include FLY Fusion Pentop Computers for LF Leapfrog Enterprises, Inc. and 1.3 MP CMOS image sensor modules for a Japanese maker of notebook computers.

In June, Nam Tai made a $700,000 deposit to acquire land in Shenzhen. It is also accelerating a planned expansion in Wuxi.