MACAO – Deswell Industries Inc. reported fiscal second-quarter nets sales of $32 million, down 16.1% year-over-year, mainly because of the continuing decline in business from the company's electronic and metallic segment.

The firm reported an operating loss of $1.7 million for the quarter, compared to operating income of $1.7 million for the same quarter of 2007.

Gross profit in the electronic and metallic segment was 11.1% of net sales, compared to 11.6% of net sales for the year-ago quarter.

Net sales for the six months ended Sept. 30 were $67.3 million, down 12.5% year-over-year.

Net income decreased $5.2 million to a loss of $382,000, compared to $4.9 million last year.

Deswell manufactures injection-molded plastic parts, components, electronic products, subassemblies and metallic products for OEMs and contract manufacturers.