Shares of Sony (SNE) traded lower Thursday after the Japanese electronics and entertainment giant said it recorded a Y59.6B impairment charge in its camera modules business, citing a "decrease in projected future demand" and weaker than expected cash flows from the division. As a result, the company also revised its overall forecast for the year ended March 31, with operating income now seen at Y290M from the previous Y320M due to the camera impairment charge as well as significantly lower interest rates in its Financial Services segment in the wake of Japan's negative rate policy.

The company is slated to report its official, final numbers on April 28. Separately, the company noted that the recent earthquakes in the region have "no impact" for the period's financial results, though it is still estimating their impact on the following year.

SMARTPHONE MARKET HITS SONY: Weighing in on the news, the Wall Street Journal explained that Sony supplies image sensors and modules to smartphone makers including Apple (AAPL) and Samsung (SSNLF), which have recently struggled amid heightened low-end competition and an overall slowing of the handset market.

CAMERA DOMINANCE THREATENED: JPMorgan analyst JJ Park downgraded Sony to Neutral and "significantly" cut his earnings estimates this morning. The analyst said he sees increasing risk to the company's image sensor business, as the Kumamoto earthquakes and concerns over future catastrophes could cause major Sony customers Samsung and Apple to diversify their sourcing.

PRICE ACTION: Shares of Sony trading in New York have slumped 5.37% to $26.42.