Shares of Sony Corp (ADR) (NYSE: SNE) were trading lower by more than 3 percent Thursday morning after the company announced it has recorded an impairment charge in operating income of 59.6 billion yen ($0.5449 billion) related to long-lived assets in its Devices segment.
Sony cited a decrease in projected future demand in its camera module business for the period beginning with the fiscal year ending March 31, 2017. The company added that given the downward revised expectations in demand, the company performance and impairment analysis and determined that future cash flows is not likely to be sufficient to recover the entire carrying amount of the long-lived assets.
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Sony also stated its operating income for the 12-month period ending in March was 290 billion yen ($2.6 billion), marking a 9.4 percent decrease from its outlook that was provided in January.
"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."