Good afternoon, ladies and gentlemen, and welcome to the NDE Conference Call on Second Quarter Results. At this time all participants are in a listen only mode. As a reminder, this conference call is being recorded. And now, I would like to turn the conference over to your host, Mr. Dan Baker, President and CEO Sir, you may begin.
Good afternoon, and welcome to our conference call for the quarter ended September 30, 2019. As always, I'm joined by Kurt Reinders, our Chief Financial Officer. This call is being webcast live and being recorded. A replay will be available through our website nve.com. After my opening comments, Kurt will present a financial review of the quarter.
I'll cover product development, sales and governance And then we'll open the call to questions. We issued our press release and filed our quarterly report on Form 10 Q in the past hour following the close of market. Links to documents are available through the SEC's website, our website and our Twitter timeline. Comments we may make that relate to future plans, events, financial results or performance are forward looking statements that are subject to certain risks and uncertainties, including, among others, such factors as risks and uncertainties related to future sales and revenue, risks related to changes in tariffs and other trade barriers, uncertainties related to the impacts of the Federal Tax Reform Act enacted in 2017, as well as the risk factors listed from time to time in our filings with the SEC including our annual report on Form Ten K for the year ended March 31, 2019. The company undertakes no obligation to update forward looking statements we may make.
Despite a challenging semiconductor market, we're pleased to report 3% sequential growth in revenue 6% sequential growth in net income, 3 product launches and 4 new distributors this past quarter. Kurt will cover the details of our financial results and I'll cover product development sales and governance.
Kurt? Thanks, Dan. For year over year comparisons, total revenue for the quarter ended September 30, 2019 decreased 13% compared to a strong year ago quarter. The decrease was due to a 12% decrease in product sales, and a 30% decrease in contract R and D revenue. We've been facing a challenging macro environment for product sales in what's been called the weakest semiconductor market in a decade.
Semiconductor sales decreased 16% year over year in the most recent but it's a cyclical industry, so it's expected to recover. The decrease in contract R and D revenue was due to the completion of compared to the quarter ended June 30. That was our 2nd consecutive sequential revenue increase. Smart sensor sales have not been significant yet, but we have several interested customers and an important robotics design win recently. We're hoping for a 3rd consecutive sequential revenue increase this quarter the December quarter as well as year over year revenue growth with new products gaining traction and a less challenging compare.
Gross margin decreased to 79% for the quarter from 82% in the second quarter last year, due to a less profitable primarily due to a 5 Dan will discuss the new products in a few minutes. Interest income for the second quarter increased 3% due to an increase in decreased 11% year over year to $3,820,000 or $0.79 per diluted share compared to last year's record 4,280,000 or $0.88 per share. We had an unusually low tax rate of 11 percent due to the benefits from the Tax Reform Act enacted in 2017. We currently expect a tax rate for each of the remaining 2 quarters of the fiscal year of approximately 18% which is similar to what we've reported was a record 59% of revenue. Net income increased 6% sequentially compared to the quarter ended June 30.
The $1 per share or $4,850,000 dividend this past quarter brought our total dividends paid to more than $97,000,000, adding in stock repurchases we have returned over $100,000,000 to shareholders in since we began aggressively returning cash to Additionally, we announced another quarterly dividend today payable November 29th to shareholders of record November 4. For the 1st 6 months of the fiscal year, total revenue decreased 12% due to a 12% decrease in product sales and a 24% decrease in contract Net income for the 1st or $1.53 per share compared to $8,230,000 or $1.70 per share last fiscal year. Comrehensive income for the first half increased slightly to $8,180,000 from $8,170,000 for the prior year period as an unrealized gain for marketable securities more than offset the decrease in net income. Now, I'll turn it over to Dan to cover the business.
Now I'll cover product development, sales and governance. A new product development sometimes takes longer than we'd like. But we had drill controls and a new type of magnetic switch. We expanded our automotive product offerings with a new isolated coupler based on the controller area network flexible 5 times the data rate and 8 times the data payload of standard controller area network transceivers. The protocol is part of our industrial internet of Things strategy.
It allows more bandwidth to support more complex data through in vehicle networks as well as faster software updates and data downloads for automotive Manufacturing and service. Our unique technology allows us to offer the smallest isolated transceivers in the industry's so called quarter size outline packages or QSOPS. Which have 1 fourth the footprint of conventional parts. The second product introduction in the past quarter an isolated coupler for next generation RS485 buses. RS485 also known as TIA-four eighty five or EIA-four eighty five is an industry standard network protocol used for factory automation and the industrial internet of things.
We have a number of our S-four eighty five transceivers and the new part is compatible with next generation 3.3 volt RS485 buses, which use less energy than legacy 5 volt parts. The 3rd new product line was announced just last week and is a series of tunneling magnetoresistance or TMR magnetic switches that provide a unique combination of low voltage, low power and high speed The new sensors can operate on With the ultra low power of our TMR technology, the new sensors can run for years on watch batteries, making them ideal for internet things applications such as utility meters and portable instruments. We are leaders in TMR Development. TMR uses structures called magnetic tunnel junctions and is generally lower power and more precise than our older giant magnetoresistance, or GMR based products. Our researchers, led by Doctor.
Joe Davies, will present a paper at the annual conference on magnetism and magnetic materials known as Triple M. In early November titled Noise Optimization in Magnetic Tunnel Junction. There are links to the abstract from our website. And there's a demonstration of the energy efficiency and speed of the new TMR sensor in a motor control application. On our website and YouTube channel.
Turning to sales. We recently added 2 distributors in India, one in Vietnam and 1 in Taiwan. These are price sensitive markets where we see growth potential. We already received a significant order from one of those distributors. Covering corporate governance, Our annual shareholders meeting was August 1st.
For good corporate practice, our entire Board of Directors stands for Election every year, and each of our directors was overwhelmingly reelected. Our executive officer compensation supports goals of profitable growth and improving long term shareholder value without being excessive and shareholders overwhelmingly voted to approve compensation. And finally, the selection of our new auditors was ratified. Details of the shareholder votes were reported on a Form 8 K we filed the day after the meeting. In addition to the formal items of business at the meeting, We explained our growth strategy of smart sensors for the industrial internet of things and we had hands on smart sensor product demonstration.
There's a video of the demonstrations on our YouTube channel. That's youtube.com/nve Corporation. Now I'd like to open the call for questions. Lance?
Your first question comes from the line of Thomas Cochran from Lake Road Partners. Your line is open.
Thank you. Good afternoon, Dan.
Afternoon, Tom.
I've got one question which kind of breaks down into 3 section the internet of things is here and getting bigger. And NBE makes devices ideally suited to serve the internet of things. When is the internet of things going to make a big difference to NVE Revenues? That's the question.
Right. Well, that's a great question. Tom, I think, part of the reason for industry has been that the internet of things, well, I think most experts believe it's inevitable, has been slower to be adopted than a lot of people thought, but it does seem inevitable. The benefits are so overwhelming. And the technology that enables it and And of course, we're a part of that is available.
So we're hoping, as Kirk mentioned in the prepared remarks, we're hoping that it's going to start showing up in this quarter, which would be our, that's our December quarter, our 3rd fiscal quarter, particularly our smart sensors. So, we're, we're optimistic. Sometimes things take longer than we would like, but we believe it's a historic opportunity.
Okay. Thank you, Dan.
I'm showing no further questions at this time. I would like to turn the conference back to Dan Baker. For closing remarks.
We were pleased to report sequential revenue and earnings growth 3 new products and 4 new distributors. We look forward to speaking with you again in January to discuss 3rd quarter results. Thank you again for participating in the call.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you have a wonderful day. You may all disconnect.