Sony Corp. lowered its outlook for full-year operating profit Thursday and said it would record an impairment charge in its camera modules business. The Japanese electronics manufacturer booked a 59.6 billion yen ($543 million) impairment charge in the 12 months ended March, citing “a decrease in projected future demand” in its camera module shipments.
Operating income was 290 billion yen ($2.6 billion) for the year, 9.4 percent below its January outlook of 320 billion yen ($2.92 billion), Sony said in a statement Thursday.
With full-year results set to be announced on April 28, the company said the recent earthquakes in Kyushu had no impact on results and the company was evaluating whether there would be any effect on the year ending March 2017.
Sony’s cameras business, which makes sensors and lenses for its cameras as well as smartphones, said that due to the fall in demand, future cash flows were unlikely to recover the carrying amount of its assets. Carrying amount of a company’s assets is calculated as the value of the assets minus depreciation.
The company, however, raised its outlook for full-year net income to shareholders, mainly because the valuation of some deferred tax assets owned by a subsidiary and its local tax obligations have changed.
The company’s stock rose 1.42 percent Thursday on the Tokyo Stock Exchange.
“Demand might be slowing, but that doesn’t mean that it’s all doom and gloom going forward,” Keita Wakabayashi, a Tokyo-based analyst at Mito Securities Co. told Bloomberg. “There are other factors that can sway demand, like the uptake of higher-end smartphones in China and sensors for front-facing cameras. The market may bottom out in the April-June quarter.”