SONY Sony Group Corporation

TOKYO—Sony Corp. lowered its estimate of operating profit in the year that ended in March, with slowing iPhone sales hurting its device business and the Bank of Japan's negative interest-rate policy reducing financial-business profits.

The electronics and entertainment conglomerate said Thursday that it now estimates its operating profit was ¥ 290 billion ($2.64 billion) in the year to March 31, compared with a forecast of ¥ 320 bSillion presented in January. It revised its net income figure upward, however, thanks to tax adjustments, saying it estimates net income was ¥ 145 billion instead of an earlier forecast of Â¥ 140 billion.

Sony will report the term's results on April 28.

The biggest factor behind the revision was a one-time impairment charge of ¥ 59.6 billion for its camera module business. Sony's chief financial officer, Kenichiro Yoshida, had warned investors in January that such a charge was likely.

The module, which contains an image sensor, is a highly profitable component in smartphone cameras. Sony supplies image sensors and camera modules to Apple Inc. and Samsung Electronics Co., analysts say. The two major providers have recently been struggling owing to competition from lower-priced handset makers as well as slowing market growth.

Sony also cited rapidly falling interest rates in Japan for its revised operating profit figures. The company runs banking and insurance units in Japan. The Bank of Japan earlier this year introduced negative interest rates on certain deposits held by commercial banks at the central bank, lowering rates across the board and hitting margins at financial institutions.

Despite the downgrade, Sony's operating profit in the recently ended year was much better than the ¥ 68.5 billion operating profit marked in the year that ended in March 2015, when Sony booked a net loss of ¥ 126 billion. The turnaround suggests Chief Executive Kazuo Hirai's years of effort to restructure the electronics company are bearing fruit.

Under the Hirai regime, Sony sold its unprofitable personal-computer arm to an investment fund and brought other consumer electronics businesses, including TVs, into the black. The company has focused its resources on high-growth units, including image sensors, PlayStation videogames and music as well as movies.

(END) Dow Jones Newswires

April 21, 2016 05:25 ET (09:25 GMT)

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