Overview

* Deswell's fiscal H1 2026 net sales fall 5.5% yr/yr due to decreased demand

* Company's gross margin rises to 23.4% from 19.5%, driven by higher-margin offerings

* Deswell's operating income increases to $2.5 mln, net income rises to $7.5 mln

Outlook

* Deswell highlights strategic priorities to stabilize performance amid challenging economic conditions

* Company focuses on higher-margin offerings and new product introductions to drive growth

Result Drivers

* DECREASED DEMAND - Co attributes decline in net sales to softened worldwide demand

* HIGHER-MARGIN OFFERINGS - Co says electronic segment gross margin increased due to enhanced value-added services and cost control measures

* LABOR COSTS - Co reports slight decrease in plastic segment gross margin due to increased labor costs from minimum wage hike

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

H1 Sales $33.23

mln

H1 EPS $0.47

H1 Net $7.52

Income mln

H1 $2.51

Operatin mln

g Income

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)