Nissan’s Operating Profit Climbs 11%
Nissan Motor Co. posted an 11% rise in fiscal fourth-quarter operating profit Monday as U.S. demand drove global sales to a record high, but it forecast a lower-than-expected 1% earnings increase this year, citing uncertain growth in the U.S. and Japanese markets.
Japan’s No. 2 auto manufacturer, which is 44% owned by Renault of France, also said it would delay by one year a previous target to sell 4.2 million vehicles globally by the end of a three-year business plan.
Other top Japanese automakers, including Toyota Motor Corp. and Honda Motor Co., are also expected to post higher earnings for the year ended March 31 as they grab market share from U.S. and European rivals.
Last week, General Motors Corp. posted its worst quarterly loss since flirting with a bankruptcy filing in 1992, and Ford Motor Co. reported a 38% drop in earnings. Both suffered sales drops on their home turf.
Nissan reported an operating profit of 249 billion yen ($2.3 billion) for its fourth quarter ended in March, bringing its full-year profit to 861 billion yen ($8 billion), up 4.5%.
Fourth-quarter revenue of 2.48 trillion yen ($23 billion) brought full-year sales to 8.6 trillion yen ($80 billion), an increase of 15.4%, Nissan said.
“Nissan’s forecast for the current business year looks conservative,” said Yoshihisa Okamoto, senior vice president at Fuji Investment Management.
After years of industry-beating growth since Chief Executive Carlos Ghosn came to rescue a near-bankrupt Nissan in 1999, the automaker is forecasting an abrupt slowdown in profit growth. It cites risks from an intense U.S. price war, higher interest rates and commodity prices, volatile exchange rates and uncertain growth in Japan and the United States.
Nissan kept two broader goals of its three-year “Nissan Value-Up” plan that began this month: maintaining a “top level” of operating profit margin among global automakers for each of the three years and achieving a return on invested capital of 20% on average during the course of the plan.
Nissan said it would launch its luxury Infiniti brand in South Korea, China and Russia as planned in the next three years, though not in Japan as originally envisioned.
In the 12 months through March, Nissan sold 3.39 million vehicles worldwide, up 10.8%.
In the U.S. market, sales jumped 18.4% to top 1 million units for the first time, thanks to brisk demand for the Altima sedan and Titan pickup truck.
