(Bloomberg) -- Sony Group Corp.’s shares tumbled after the electronics and entertainment group warned about delays in a smartphone market recovery and gave a financial outlook that missed expectations.

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Sony’s stock price dropped as much as 6.7% during Thursday morning trade in Tokyo, the biggest intraday fall in a year.

The key supplier of image sensors to Apple Inc. and other device makers said it didn’t expect demand in the mobile phone market to bounce back until next year at the earliest, due to sluggish demand in both China and the US. Sony had earlier said it expected a second-half rebound in global phone sales.

The Tokyo-based company’s operating income fell 31% in the first fiscal quarter because of sharp declines in the movie and sensor groups. Net income dropped 17% even as revenue rose 33%.

“Earnings collapsed in movies and semiconductors,” Citigroup Inc. analyst Kota Ezawa wrote in a note to investors.

Sony nudged up its net income forecast by 2% to ¥860 billion ($6 billion) for the fiscal year, closer to but still missing analyst estimates. Its outlook was weighed down by slashed expectations on its image sensors and movies divisions. Strikes by writers and actors in Hollywood are likely to mean lower sales due to delays in theatrical releases and TV series launches, it said.

The Japanese company also reported weaker-than-expected sales for its flagship PlayStation 5 during the April-June quarter, igniting concern the company will need to spend more on marketing to achieve its goal of selling 25 million units this fiscal year.

“All eyes are now on how Sony can grow PlayStation subscriber numbers and the release of Spider-Man in the fall. That game absolutely has to deliver in order to carry Sony through the holidays and into 2024,” said industry analyst Serkan Toto, referring to the PS5-exclusive title Marvel’s Spider-Man 2 to launch on Oct. 20.

Sony has been beefing up its content offerings in recent years, though the biggest hits of the summer have come from its rivals — from Activision Blizzard Inc.’s Diablo IV to Warner Bros. Pictures’ Barbie, a film that Sony previously held the rights to.

Sony saw fewer blockbuster movies this year, while costs rose, Mitsubishi UFJ Morgan Stanley analyst Tomoki Komiya told investors.