(Bloomberg) -- Sony Corp.’s forecast for operating earnings missed analysts’ estimates and the company withdrew its financial targets for electronics and entertainment due to a tougher business environment.

Sony sees an operating profit of 810 billion yen ($7.3 billion) for the year ending March 2020, down from last year’s 894 billion yen and compared with the 843 billion yen expected. Operating income came to 82.7 billion yen in the three months ended March, surpassing the 69.1 billion yen average projection.

Sony is known for providing conservative guidance, but Chief Executive Officer Kenichiro Yoshida now faces the real prospect of shrinking profits due to losses at the Xperia phone unit, uncertainty in films, and fewer blockbusters for the aging PlayStation 4. With shares lagging the market this year, any bottom-line weakness could give activist investors including Daniel Loeb an opening to force concessions like stock buybacks.

“We still see near-term headwinds on the shares due to the likelihood of tepid guidance,” Damian Thong, an analyst at Macquarie Group Ltd., wrote in a report this week upgrading shares. “Market interest in potential shareholder activism will intensify the spotlight on Sony’s strategic options and capital allocation.”

Shares of Sony have fallen 2.1 percent this year prior to the results, compared with a 8.3 percent rise in the benchmark Topix. Japan is heading into a prolonged holiday, with trading in Tokyo restarting only May 7.

To contact the reporters on this story: Yuji Nakamura in Tokyo at ynakamura56@bloomberg.net;Yuki Furukawa in Tokyo at yfurukawa13@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter Elstrom

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