TOKYO—Sony Corp. projected Tuesday a deeper loss for its image-sensor component business this fiscal year due to the effects of the recent earthquakes that hit its factory in Kumamoto on the southern Japanese island of Kyushu.

For the current fiscal year ending March 2017, the Japanese electronics and entertainment group now says its device unit, which includes image sensors, would incur an operating loss of 40 billion yen ($367 million), worse than the ¥ 29.2 billion loss for the fiscal year that just ended. Image sensors are a key element in the cameras used in many smartphones, including Apple Inc.'s iPhone.

The company said its device unit's operating profit would be pulled down by about ¥ 60 billion because of the impact of the earthquakes. Sony's large device-making factory in Kumamoto was forced to completely halt operations for several weeks.

Sony said sales of image sensors would increase thanks to expected orders from smartphone makers. But recent rises in the yen, the earthquakes, as well as the company's decision to stop making a camera component that includes the image sensor, will trim revenue.

The conglomerate as a whole has projected a ¥ 300 billion operating profit and a ¥ 80 billion net profit on ¥ 7.8 trillion revenue for the fiscal year.

Sony booked an operating profit of ¥ 294.2 billion in the fiscal year that ended in March 2016, and aims reach ¥ 500 billion for the year through March 2018. Morgan Stanley MUFG Securities analyst Masahiro Ono said Tuesday before the company announced its new outlook that it "remains on track" to reach that target.

Sony's other pillars include the PlayStation video-game business, which is projected to make an operating profit of ¥ 135 billion thanks to strong sales of PlayStation 4 consoles and related network services.

Sony has shipped more than 40 million console units since the product was introduced in November 2013, and it plans to ship 20 million in the current fiscal year.

Sony's music business is expected to generate a ¥ 63 billion profit, in part due to growth in the online music streaming industry.

Sony said its Xperia smartphone business is expected to make a profit of ¥ 5 billion. The unit has been the group's weakest, but its chief, Hiroki Totoki, a close aid to Mr. Yoshida, has committed to turning the unit around this year and keeping it profitable thereafter.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

 

(END) Dow Jones Newswires

May 24, 2016 03:25 ET (07:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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