Nissan Motor reported a bigger-than-expected 23% fall in quarterly net profit on Friday, hurt by a sluggish recovery in U.S. sales, and lowered its full-year forecasts despite a weaker yen.
The maker of the 350Z sports car and Versa subcompact was overtaken by Honda Motor Co. as Japan's No.2 carmaker by volume last year, as vehicle production fell sharply amid a lack of new model launches.
Chief Executive Carlos Ghosn had flagged a recovery during the October-March second half, but high gasoline prices and an escalating price war hit sales of Nissan's SUVs and other light trucks in the United States, curbing retail sales growth in the December quarter.
Robust passenger car sales lifted Nissan's U.S. sales by an adjusted 4.5% last month, but sales of light trucks slid 12%.
Nissan, 44%-owned by Renault, cut its operating profit forecast for the full year to March 31 by 12% to 775 billion yen and its net profit forecast to 460 billion yen from a prior estimate of 523 billion yen.
October-December operating profit dipped 16.6% to 183.1 billion yen ($1.52 billion), below an average estimate of 218.7 billion yen in a Reuters Estimates survey of five brokers, and Nissan's fourth quarterly drop in a row.
Quarterly net profit fell 23% to 104.5 billion yen, compared with market estimates of 132.2 billion yen. Revenues rose 1.8% to 2.34 trillion yen.
Even with the yen's fall against the dollar and euro -- good for Nissan when it brings home overseas earnings -- most analysts expect Nissan to miss its full-year profit targets and book its first earnings fall in the seven years of Ghosn's leadership.
Worldwide, Nissan's production fell 7.7% last year, and sales dipped 3.3% to below 3.5 million units, a first decline in five years. Its U.S. sales fell more than 5 percent, knocking back its share of the world's biggest car market to 6.2%.
Most other Asian carmakers are making huge strides in the world's biggest car market at the expense of General Motors and Ford Motor as the U.S. giants restructure and axe tens of thousands of jobs amid shrinking sales and high legacy costs such as healthcare.
Combined U.S. sales for January by Toyota, Honda, Nissan, and South Korea's Hyundai Motor and Kia Motors outstripped those by GM and Ford combined.
The business year from April 1 should be better for Nissan as it launches its Qashqai crossover and other strategically important models.
On Wednesday, rival Honda posted a 5.2% rise in quarterly operating profit as a soft yen and brisk sales in the U.S., Europe and Asia made up for higher materials costs.
Japan's top-ranked Toyota Motor is expected to post a double-digit rise when it reports profits on Tuesday.
Nissan shares rose 8.3% in October-December, underperforming the transport sector subindex's ITEQP.17.4 percent gain. Toyota rose 24% and Honda 18.4% in the same period.
Nissan closed down 1.8% at 1,509 yen on Friday ahead of the results.
In other earnings, fellow Japanese carmaker Fuji Heavy Industries Ltd. reported a 4.8 percent drop in operating profit to 35.75 billion yen for the first nine months of the business year on slumping domestic sales, and kept its full-year forecasts for a 14 percent drop unchanged.