Nissan Forecasts Annual Loss, First Under CEO Ghosn

Nissan Motor posted a big quarterly loss on Monday and warned it would lose money this year, marking its first fall into the red since Chief Executive Carlos Ghosn took the reins a decade ago.

Japan's No.3 automaker also said it would produce 20 percent fewer vehicles in the year to the end of March than it had planned at the beginning of the year due to a global slump in car sales.

Last week, domestic rival Toyota Motor tripled its annual operating loss forecast citing a faster-than-expected sales slump in the main U.S., Japanese and European markets. Honda Motor also cut its forecast last month, but expects to stay in the black.

For the year to March 31, Nissan now expects an operating loss—its first in 14 years—of 180 billion yen ($2 billion) instead of the 270 billion yen profit it projected three months ago. Consensus forecasts from 19 analysts had put the loss at 70 billion yen.

Nissan, 44 percent owned by Renault, expects its net loss at 265 billion yen instead of a 160 billion yen profit.

Saddled with excess capacity and headcount with sales plummeting in developed markets, Nissan has cut 2,000 non-permanent manufacturing jobs in Japan, sought and got 1,200 voluntary early retirement applications in the U.S. and temporarily laid off 3,300 workers at its Barcelona plant.

The spreading global recession has put consumers off of buying expensive goods and even if they wanted to purchase a car, financing has become difficult due to a dearth of credit.

Shares in Japanese automakers have slumped across the board in the last year but Nissan has fallen harder than Toyota and Honda, which have healthier balance sheets and liquidity positions.

Rising debt at Renault, in which Nissan holds 15 percent, has also raised worries about any knock-on effects on the Japanese automaker.

Nissan's shares have dived more than 70 percent in the last 12 months, while Toyota and Honda are down 47 percent and 30 percent. Nissan has shed $12 billion in market value since Ghosn arrived from Renault to rescue Nissan in 1999.

(Watch the accompanying video for more on Nissan's earnings numbers...)

Sales in major markets started the year on a bleak note. Nissan's sales in the United States, its biggest market, fell 33 percent in January, and by a similar rate in Japan.

For October-December, Nissan made an operating loss of 99.2 billion yen and a net loss of 83.2 billion yen. A year ago, it made an operating profit of 211.9 billion yen and net profit of 132.2 billion yen.

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Third-quarter revenue fell by about a third to 1.8 trillion yen.

Nissan's shares are the worst performer in the domestic auto sector in the year to date, falling 13 percent against a 7 percent rise in Tokyo's transport sub-index. The stock ended down 5.8 percent at 261 yen ahead of the results.

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