MACAO, CHINA -- Deswell Industries reported fiscal second-quarter sales in its contract electronics and metallic segment rose 28.1% to $10.9 million.

Overall net sales for the quarter ended Sept. 30 were $24 million, up 15.2% from 2009. The operating loss was $2.9 million, compared to operating income of $1.7 million last year. The net loss was $1.6 million, down from net income of $3.1 million. Deswell blamed higher wages and appreciating currency for the profit drop.

Gross profit margin in the electronic and metallic segment, which makes printed circuit boards and other products, increased to 14% percent of net sales, up 240 basis points from the year-ago quarter.