Nissan surprise Q3 gain on Europe

Nissan Motor posted a surprise rise in quarterly profit on better-than-expected vehicle sales and a weaker yen.

Nissan Motor Co, Japan's second-biggest auto maker, posted a surprise rise in quarterly profit on better-than-expected vehicle sales and a weaker yen, and reiterated its forecast for a small gain in full-year profit.

HT Image

Nissan, 44 per cent-owned by Renault SA and valued at more than $50 billion, had struggled against shrinking demand in major regions after it raced to meet a pledge to sell 3.6 million vehicles globally in the 12 months to last September.

The company, which prides itself on being the world's most profitable mass-volume auto maker by operating margin, had been expected to be alone among Japan's top car companies in posting lower third-quarter operating profit.

While sales in its two biggest markets -- the United States and Japan -- dipped, buoyant shipments in Europe, China and some smaller markets helped overall sales volume rise slightly during the quarter, Nissan said on Thursday.

October-December operating profit grew 5.2 per cent to 219.62 billion yen ($1.86 billion). The average forecast from four brokers surveyed by Reuters Estimates had predicted a 2.5 per cent fall to 203.5 billion yen.

Net profit inched up 0.6 per cent to 134.98 billion yen, while revenue climbed 10.0 per cent to 2.301 trillion yen, giving an operating margin of 9.5 per cent, still relatively high, but down from 10.0 per cent a year earlier.

Global retail sales rose 0.4 per cent to 819,240 vehicles during the third quarter. New products such as the Murano sport utility vehicle drove sales up 25 per cent in Europe, while Chinese sales swelled with the Tiida and Teana sedans.

Sales in Japan dipped 19 per cent, partly due to difficult comparisons from a year earlier, when Nissan rolled out five new cars around that time.

A lack of new models saw sales in the all-important US market shrink by 7.1 per cent.

Rivals Toyota Motor Corp and Honda Motor Co, meanwhile, are charging ahead in the US as they lure customers away from General Motors Corp and Ford Motor Co.

Analysts expect more growth for the Japanese brands with the launch of models such as the Toyota Camry and Honda CR-V.

While Nissan aims to shift gear with this summer's launch of the Versa subcompact, analysts are concerned about shaky sales of its Titan pickup truck and other larger vehicles given high gasoline prices.

Nissan's product pipeline is empty in the United States until the latter half of this year.

For the year to end-March, Nissan kept its forecasts for a slight gain in operating profit to 870 billion yen and in net profit to 517 billion yen based on unchanged dollar and euro rates of 105 and 130 yen, respectively.

The yen is now at a much weaker 118 yen to the dollar and 142 to the euro, leaving more room for currency windfalls.

The soft yen helped rival Honda beat market forecasts earlier this week with a 24 percent jump in quarterly operating profit and higher, currency-adjusted full-year forecasts.

Toyota is due to report its quarterly results on Tuesday.

Nissan shares fell 7.8 per cent in October-December, lagging an 18.7 percent gain by the Nikkei average and the transport sector's 12.3 per cent rise.

The stock closed up 0.93 per cent at 1,305 yen on Thursday ahead of the results.

The Tokyo-based company also announced it would buy back up to 17 million of its own shares -- 0.38 percent of the total outstanding -- or up to 19.5 billion yen's worth.