Nissan Profit Rises on Sales Gain, Keeps Forecast
Nissan Motor, Japan's third-biggest automaker, reported a 16 percent rise in quarterly profit on Friday, helped by the popularity of vehicles such as the Rogue and Qashqai SUVs, and stuck to its forecast for a small gain for the full year.
Rising sales have helped Nissan make more use of its domestic car factories despite a shrinking Japanese market.
Carlos Ghosn, chief executive of both Nissan and Renault, had flagged a solid performance for the current half year, with powerful growth continuing in the emerging markets of China, the Middle East and elsewhere.
While Ghosn has been downbeat on the outlook for the key U.S. market, he has said expectations of softer demand on the back of the subprime loan fallout had been factored in and would not derail Nissan's sales plans for the business year to March 31.
"We're taking a cautious stance for the fourth quarter and beyond, but unlike the situation a year ago this is due to tough external conditions -- the U.S. subprime crisis, turmoil in financial markets, commodity costs -- and not Nissan-specific challenges," Corporate Vice President Joji Tagawa told a news conference.
October-December operating profit at Nissan, held 44 percent by Renault, came to 211.9 billion yen ($1.99 billion), up from 183.1 billion yen a year ago despite a 20 billion yen negative impact from currency swings.
That was roughly in line with an average estimate of 213.5 billion yen from seven brokerages surveyed by Reuters Estimates.
Third-quarter net profit grew 27 percent to 132.2 billion yen while revenue rose 18 percent to 2.77 trillion yen.
The result was inflated by a change in the accounting period for its European and Mexican subsidiaries, Tagawa said. Stripping that out, operating profit would have fallen 7.2 percent in the quarter, and net profit by 1.3 percent.
For the full year ending on March 31, Nissan kept its forecasts unchanged for an operating profit of 800 billion yen and net profit of 480 billion yen, roughly in line with consensus forecasts from 20 brokerages.
Further out, all eyes will be on a new business plan to be unveiled in April for the three years to March 2011. Ghosn has signaled accelerated growth, with more than 33 new models planned for launch compared with 28 during the past three years.
Domestic rivals Honda Motor and Suzuki Motor this week also reported double-digit rises in quarterly profit thanks to stronger car sales and windfalls from the yen's fall against currencies other than the U.S. dollar.
Toyota Motor is also expected to post a stronger third quarter when it announces results next Tuesday.
Nissan said its U.S. sales volume rose 3.7 percent versus a 2.5 percent fall in the total market thanks to healthy sales of the Rogue crossover, launched in September.
Sales in Japan fell 0.9 percent but that was better than a 3.7 percent fall in overall demand, boosting Nissan's market share, Tagawa said.
European sales rose 12.5 percent, largely fuelled by runaway demand for the Qashqai SUV. Nissan said on Thursday it would add 800 staff and begin a third production shift at its plant in northeast England in response to demand for the Qashqai.
Collective sales in markets outside Japan, Europe and North America grew 28 percent, fuelled by big gains in China and the Middle East.
The dollar averaged a less favorable 113.3 yen in the third quarter versus 117.8 yen a year earlier, but Tagawa said Nissan was relatively well-protected due to the high rate of local production in the United States, at 80 percent.
"Our localization is high compared with our rivals, and we're benefiting from this natural hedge," he said.
Shares of Nissan lost 33 percent in the year to Thursday, underperforming Tokyo's transport sub-index ITEQP, which has fallen 26 percent.
Prior to the earnings announcement, the shares ended down 0.7 percent on Friday, against a 0.1 percent rise in the subindex.