Sony shares rallied after one of its worst days in Tokyo for a year as it warned of a delayed recovery in the smartphone market and a financial outlook below expectations.
The electronics and entertainment giant, a major supplier of image sensors to Apple iPhones and others, cited sluggish demand in China and the US, adding mobile phone demand is unlikely to recover before next year.
Previously, the Japanese giant had been guiding towards a second-half pick-up.
First-quarter operating income fell by 31% due to significant declines in its movie and sensor divisions, with net income dropping 17% despite a 33% revenue increase.
The company cut its net income forecast for the year by 2% to US$6 billion, reflecting the slashed expectations for image sensors and movies.
PlayStation 5 sales were also weaker than expected from April to June.
In the US, shares opened up almost 4% at US$86.14.