1
                                                                    EXHIBIT 11.1

                               XETEL CORPORATION
                       COMPUTATION OF EARNINGS PER SHARE
                        IN THOUSANDS, EXCEPT SHARE DATA
                                  (UNAUDITED)




                                                       Three Months Ended
                                                     ---------------------- 
                                                     June 28,     June  29,
                                                       1997         1996
                                                       ----         ----
                                                          
Shares issued and outstanding               (1)        8,811        8,536
                                                                 
Common Stock Equivalents:                                        
     Stock options                          (2)          827          967
                                                      ------       ------
                                                                 
Weighted average shares outstanding                    9,638        9,503
                                                      ======       ======
                                                                 
Net income                                            $  455       $  846
                                                      ======       ======
                                                                 
Earnings per share                                    $  .05       $  .09
                                                      ======       ======


(1) Shares issued and outstanding based on the weighted average method.

(2) Stock options based  on the treasury stock  method using average market 
    price.