Nissan returns to quarterly profit after two years but cuts sales outlook on China weakness
The Japanese carmaker posted an operating profit of ¥78 billion for April-June, reversing a year-earlier loss, while lowering its full-year volume forecast by 150,000 units.
Nissan Motor Co. swung to an operating profit of ¥77.89 billion ($497 million) in the first quarter of its financial year, the company reported on Monday, ending a two-year run of quarterly losses. The result compares with an operating loss of ¥79.12 billion a year earlier and exceeded analyst estimates that had pointed to a modest profit of ¥6 billion. Net profit came to ¥3.76 billion, against a loss of ¥115.76 billion in the same period last year. Revenue rose 9.5 per cent to ¥2.96 trillion, even as global unit sales edged down to 701,000 vehicles from 707,000.
The improvement reflects the early effects of the Re:Nissan recovery plan, which delivered an additional ¥60 billion in cost savings during the quarter through job cuts and plant reductions. Chief Executive Iván Espinosa said the company had made “considerable progress” in lowering costs, but cautioned that industry headwinds were weighing on parts of the business. The carmaker is attempting to stabilise after successive annual losses, a failed alliance with Honda, and a credit-rating downgrade to junk status, while shareholders at the June annual meeting voiced discontent over the share price and a thin product pipeline.
Nissan maintained its full-year forecasts for revenue of ¥13 trillion and operating profit of ¥200 billion, but cut its global sales-volume target to 3.15 million units from 3.3 million, citing a tougher market environment, particularly in China. Espinosa noted that total Chinese auto-industry sales fell 22 per cent in the first half, while Nissan’s own China sales dropped 15 per cent. The company also flagged persistent uncertainty in the Middle East, where it has identified alternative supply routes but expects profitability to be affected until supply chains normalise.
Shares of Nissan fell 3.3 per cent in Tokyo trading on Monday before the earnings were published. The full-year outlook remains unchanged, leaving the next milestone as the company’s ability to meet its volume and profit targets amid the deteriorating conditions in its largest markets.
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| Russian & CIS press | +0.70 | aligned |
Restructuring is paying off: Nissan posted its first quarterly profit in two years, but also cut its sales forecast. The voice is that of a market observer acknowledging both the turnround and the headwinds.
By juxtaposing the profit figure with the lowered sales forecast, the narrative creates a balanced picture of a managed recovery that maintains credibility through transparency.
Nissan surprised analysts with a profit, and that is the story. The voice is of a business wire celebrating a turnaround, ignoring the sales forecast cut.
By omitting the lowered global vehicle sales outlook entirely, the narrative constructs a story of unqualified success, making the profit beat the sole headline.
The lowered global vehicle sales forecast is omitted entirely, presenting only the profit improvement.
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