This is a key point about the earnings. The COVID-19 pandemic has spread around the world, heavily impacting the real economy. Against this backdrop, the demand environment for our business for the 1st quarter is showing deviation from what we have forecasted at the beginning of this fiscal year. In the automotive and HDD, hard disk drive markets, our major clients have suspended operations at their plants. This has had a major impact on our business, and our sales towards these markets is substantially lower than our initial market forecast. Excuse me. In the ICT market, smartphone demand has declined sharply than our initial forecast. That is basically in line with initial forecast. Due to digital transformation, DX has accelerated through remote working and remote learning. This led to an expansion of demand in mobile devices and 5G-related products, which was higher than our expectations.
The demand trend in our key markets has changed against our outlook, and there are differences in the performance by each segment. However, overall, year-over-year, net sales decreased 8.1%, and operating income declined 26.4% year-over-year. Although the market environment has been tough, sales and operating income for rechargeable batteries has increased as we were able to tap into demand. Demand expanded for PCs, tablets, and 5G base stations through the acceleration of DX. Sales of rechargeable batteries, MLCCs, and high-frequency components increased. This led to higher sales year-over-year, and performance exceeded the initial forecast. As a result, these businesses drove the first quarter earnings, despite the fact that we were assuming weak earnings for this quarter.
On the other hand, due to the weak demand in the automotive market, we saw a lower-than-expected sales in passive components and conventional sensors, which have a high sales composition to the auto markets. Sales of HDD heads decreased more than expected as the shutdown of our major client has had a major impact. As a result, sales volume was lower than expectations. The earnings deteriorated sharply than expected. As for the consolidated results, due to the strong yen against the dollar and other currency, there was a negative impact on sales of JPY 11.3 billion, JPY 1.3 billion positive impact on operating income. Including this factor, net sales was JPY 309.4 billion, down JPY 27.4 billion, or 8.1% decline year-over-year. Operating income was JPY 18.4 billion, down JPY 6.6 billion, or 26.4%. Income before income tax was JPY 20.7 billion. Net income was JPY 13.2 billion. Earnings per share was JPY 104.43.
Sensitivity against the currency is unchanged. On an operating income level, if yen fluctuates by one yen against the dollar, it will have a JPY 1.2 billion impact annually. The yen/euro impact is about JPY 200 million. Let me explain the results by segment. Net sales for the passive component segment was JPY 84.4 billion, down 14.1% year-over-year. Operating income was JPY 7.7 billion, down 25.2%. OP margin was 9.1%. In the automotive industrial equipment markets, demand has continued to be weak from last year. Particularly in the auto market, as our major client suspended operation of their plants due to COVID-19, demand dropped further than we expected. On the other hand, in the ICT market, demand for 5G terminals and base stations was very strong, especially in the Chinese market. There also was front-loaded demand in this area as clients moved to secure stock for components.
This led to higher-than-expected sales for the ICT market. As a result, in products that have a high proportion of sales to the auto and industrial equipment markets, such as capacitors, inductors, piezoelectric material products, and circuit protection components, and aluminum electrolytic and film capacitors, both sales and profit declined. However, in this first quarter, as demand grew strongly for 5G base stations, sales of capacitors for base stations increased substantially. Consequently, although profits declined, we were able to maintain profitability at the same level of the previous year. As for high-frequency components, which has a high sales ratio for the ICT market, both sales and profit increased thanks to the robust sales of 5G-related products. Profitability has improved substantially as well. Next is the sensor application product segment. Net sales was JPY 14.7 billion, down 18.8% year-over-year.
Operating income continued to be in the red at the same level as last year. As about 50% of our sales for the segment goes to the auto market, specifically for conventional sensors, it has been severely impacted by the weak demand in the auto market. In this first quarter, our major auto customers, mainly in the U.S. and Europe, have suspended operation of their plants. This has had a direct impact on our temperature and pressure sensors and Hall sensors, where sales declined sharply and earnings worsened as well. On the other hand, TMR sensors have been fairing well, stably generating profit as sales have been robust due to increased share of our products for smartphones. In MEMS sensors, sales of microphone MEMS declined due to the shrinking demand for microphones for IoT devices, reflecting the weaker consumer sentiment under COVID-19.
Sales of motion sensors have gone down as well, as less smartphone models are using motion sensors. For MEMS sensors overall, as the top line did not grow, it is still loss-making, although the level of loss is improving. Going to the magnetic application products segment. Net sales was JPY 38.3 billion, a 31.0% decline year-over-year. Operating loss was JPY 3.8 billion. As for the overall market environment for the first quarter, total demand for hard disk drives went down by 20% year-over-year. Total demand for HDD heads was about the same as last year due to the increase of nearline HDDs. However, our major client suspended operation at their plant due to COVID-19. This led to a situation where shipment of HDD heads fell by 45%, which was worse than our initial forecast.
Although there was earnings improvement for HDD suspension assemblies year-over-year, for the HDD heads and HDD suspension assemblies business overall, both sales and profit dropped sharply. Most of the sales magnets go to the auto industrial equipment market. Sales dipped and the loss level is about the same as last year due to the overall weak demand in these markets.
Energy application products. Net sales was JPY 156.9 billion. Operating income was JPY 31.3 billion, 8.6% increase of net sales. That's a substantial increase of operating income of 18.1% and the operating margin was 19.9%. The improvements of the profitability for the rechargeable batteries, and due to the decrease of the smartphone productions, and although we could slightly over that initial forecast, but now it has the negative growth year-on-year. With expansion of teleworking, telelearning, now we observe that a substantial increase of demands of the tablet and notebook PC, and that sales volumes have boosted. Also for that application, like the gaming consoles or the mini cell for those wearable devices like a wireless one, had steadily expanded.
That as a whole now we could achieve and exceed the initial forecast, and we have a significant increase in both net sales and operating incomes. For the industrial power supply, and it was adversely affected by the decline in demand, and we have the negative growth in both net sales and operating income. Next, let me talk about quarter-over-quarter changes of the net sales and operating income by segment. First off, passive components segment. The sales declined by JPY 12.6 billion, 13.0% from the Q4. Operating income was increased by JPY 1 billion, 14.9%. When it comes to the net sales, particularly due to this increase of 5G-related businesses, now we have increase in the sales for the ICT markets. Also, we have the incremental business for the distributors.
On the other hand, now the customer in Europe for the automotive market suspended its factory operations, and that is significantly lower. That is our net sales. Except for the high-frequency components, which have been flat from Q4, all in all, net sales was negative. When it comes to operating income, excluding JPY 2.1 billion of that impaired loss from the last quarter, actually, on an operating basis, JPY 1.1 billion up the down. For that high-frequency component products, while it has been favorable in ICT market and have been significant increases to the incomes also for the capacitors, decline in business automotives have been more than offset by the base station businesses, so that it could improve profitability, although sales have slightly declined. All the other products were adversely affected, that is the decline of demand.
When it comes to the Sensor Application Products, the sales declined by JPY 4 billion, 21.5% quarter-on-quarter basis. We have this JPY 300 million of more operating loss. Again, it is due to the suspension of factory operation of our European automotive customers, have adversely affected the sales of the Temperature and Pressure Sensor and Hall Sensor. On the other hand, MEMS Motion Sensor have been favorable, due to that sales for the gaming consoles. They can more than offset all the negative impacts of other sensors, have been flat from the Q4. When it comes to the operating performance, Temperature and Pressure Sensor had declined its income due to the decline in the sales. Now, magnetic sensor and TMR Sensor have been steady, have been offset. Also for the MEMS sensors, now we could shrink and trim down.
That's the loss due to our cost reduction. Next, magnetic application products. Sales have declined by JPY 13.5 billion, 26.1% decline from the previous quarter. Excluding the JPY 14.4 billion of that impaired loss in Q4 and apple-to-apple basis, it was declined by JPY 6.7 billion. The sales of this segment have affected by the declining sales volumes of HDD head, about 44%, and also high HDD head suspension as a whole declined by 28% from the previous quarter, and also the magnets have declined in 12% in terms of net sales. This is for now. I continue the magnetic application products for the operating performance of this segment. HDD head have the operating loss due to that decreased the sales volumes and also the magnets. We could trim down the margin of loss due to the cost reduction. Next, energy application product segments.
The sales was JPY 38.6 billion, 32.6% increase. Operating income was JPY 16.6 billion. It's about close to significantly and increased about the double. When it comes rechargeable batteries, now it had increased from the seasonally declined demand of the Q4, but also we have the incremental demand of the tablet and PC. Industrial power supply have a slightly lower than the previous quarter. Next, let me talk about breakdown of the operating income changes from year-on-year basis. It is about JPY 6.6 billion down. First of all, due to the change in the sales, mainly for the passive components and HDD head, have the negative JPY 9.7 billion. The sales price reduction have negatively also affected JPY 2 billion. On the other hand, now for the cost reduction efforts, in order to absorb the impacts of COVID-19, have produced JPY 5.3 billion of benefits.
A JPY 500 million is also for the positive due to the selection benefits. JPY 300 million as for the M&A expenses for the InvenSense. The SG&A, for example, when it comes to rechargeable business, we need to have the more R&D expenses and also the termination of the filter fee, pushed up by JPY 2.3 billion. This is for the SG&A. The JPY 1.2 billion of the exchange of fluctuations there. All in all, JPY 6.6 billion minus from the previous year. Next, let me talk about the projections on change in sales in Q2. In the Q1, due to that automotive industry, which was vastly affected, the suspension of plant operations in Europe, and still some of the performance will vary from region to region.
We think that will be recovered to the level a little lower than the initial forecast. When it comes to ICT markets, and now we expect that the smartphone production units will also be recovered through that, a little over to that initial project, and the PC and tablet demand will be steady. Taking all this into considerations, now we like to look at the projections of the sales in each segment. When it comes to passive components, we expect that it will be on par with the Q1. We expect that the sales and the automotive markets will increase. When it comes to smartphone related markets, we expect the reaction of fall of the pile of inventory in the Q1.
We think that the demand of the base station will slowly decline and also the inventory adjustments of the distributors will vastly affect. When it comes to Sensor Application Products, we expect that the restart of the factory operations of the European automotive customers, it will push up that our business for the temperature and the pressure sensors and the TMR sensor and the MEMS microphone will increase from Q2. When it comes to Magnetic Application Products, when it comes to the HDD head, we expect that our major customer will fully restart their factory operations, and we expect the recovery of the HDD head volumes up to that initial forecast and HDD suspension will also be pushed up for the demand for nearline HDDs. The magnets will also increase due to that increasing in the demands in automotive markets.
When it comes to energy application products, on top of that, the demand for the smartphones and the PC and tablets demands will further surge, and we expect that the miniaturization will demand for the wearable devices. Taking all this into considerations, the sales in Q2 will increase by 11%-14% from Q1 as a whole. This is our projections. Last of all, let me talk about the projections for the full year forecast. We do not change from that forecast we announced the last time in May. In Q1, now we observe that and then boosted the demand for the Digital Transformations and also, so the supply chain have increased the inventory. That performance was exceeded our forecast.
Now still, it's uncertain that what kind of impact we have to expect from the COVID-19 on the business and the three major markets, automotive, ICT, and industrial equipments. Now, when I look at that forecast, still that each market varies from the market to market when it comes to that demand. Also, we are looking at the changes and the difference and that each segment forecast. All in all, we expect that our projection is still stay the same, and we don't change our forecast at this moment of time. That's all my presentation. Thank you very much. Thank you for your attention. Thank you.