Japan's Sony Corp on Friday said operating profit fell in its first quarter by 42 per cent, less than analysts had estimated, as the electronics maker trimmed the impact of earthquake damage to one of its image sensor factories.

Profit reached 56.2 billion yen ($542.7 million) for April-June, versus 96.9 billion yen ($935.3 million) in the same period a year earlier. That result compared with a Thomson Reuters Starmine SmartEstimate of 7 billion yen ($67.5 million) drawn from 10 analysts.

The firm maintained its full-year profit forecast of 300 billion yen ($2.8 billion), a 2.0 per cent rise over the previous year. It also estimated the April quake's impact on overall business at 80 billion yen ($772 million), less than its initial forecast of 115 billion yen ($1.1 billion).

Sony has partially halted production of its cash-cow image sensors to assess damage from quakes that shook the southern city of Kumamoto, home to one of its five image sensor plants.

Its chips division, which includes image sensors, booked an operating loss of 43.5 billion yen ($419 million) in the first quarter, compared with profit of 32.7 billion yen ($315 million) a year earlier.

The loss, however, was offset by strong demand for PlayStation 4 videogame software and cost cuts in its struggling smartphone business.

The gaming division, which Sony sees as its biggest growth driver in the medium term, reported profit of 44 billion yen ($424 million), up from 19.5 billion yen ($188.1 million) a year prior.

The business is widely expected to receive renewed impetus from the PlayStation VR, Sony's upcoming virtual reality headset to be launched in October.

Sony has reshaped itself to target expansion in lucrative areas such as videogames, entertainment and camera sensors, and not to pursue sales growth in areas such as smartphones where price competition with Asian rivals is acute.

In line with this strategy, Sony on Thursday said it has agreed to sell most of its ailing battery business to Murata Manufacturing Co Ltd.

Sony flagged a possible loss from the sale depending on the as yet-undetermined price, but analysts viewed the deal as another move out of unprofitable operations.

The sale "will have a big impact on reducing all-company fixed costs," analysts at Mizuho Securities said in a client note, pointing to the transfer of 8,500 workers in the business. - Reuters