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Nissan Q1 beats expectations as it recovers from quake

Nissan Q1 beats expectations as it recovers from quake
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First Published: Wed, Jul 27 2011. 01 34 PM IST
Updated: Wed, Jul 27 2011. 01 34 PM IST
Yokohama: Nissan Motor Co reported a smaller-than-expected 10.4% fall in quarterly operating profit on Wednesday as it recovered swiftly from a parts shortage that hammered the industry after the 11 March earthquake.
Japan’s second-biggest automaker posted an operating profit of ¥150.37 billion ($1.93 billion) for the April-June period, more than double the average of ¥70 billion from estimates of eight analysts, according to Thomson Reuters I/B/E/S.
Net profit was ¥85.0 billion, down 20.3% from the year-earlier first quarter, while revenues rose 1.6% to ¥2.08 trillion.
Nissan, 43% owned by Renault SA , is poised to outshine Toyota Motor Corp and Honda Motor Co this year thanks to a relatively swift recovery from the supply disruption and an aggressive expansion in China.
Honda and Toyota, which will report earnings on 1 August and 2 August, are both forecast to post an operating loss, although comparisons favour Nissan because it books earnings from China at the operating level under Japanese accounting rules. Toyota and Honda use US standards, which require their Chinese earnings to be booked at equity on the bottom line.
Nissan kept its forecasts for operating profit at ¥460 billion and net profit at ¥270 billion for the full year to March 2012, below consensus forecasts.
Nissan is planning to boost sales by 9.9% to 4.60 million vehicles this year, driven by projected double-digit growth in China and Europe. Earlier this week, Nissan outlined mid-term growth plans for its Southeast Asian and Chinese operations calling for big gains in market share.
Global automakers, however, face growing risks of an economic slowdown as debt worries escalate in the United States and Europe, while demand for cars has slowed in China, the world’s biggest auto market.
Ford Motor Co on Tuesday reported a better-than-expected net profit but remained cautious about consumer demand, saying it expected US sales for this year to be at the bottom end of its forecast of 13 million to 13.5 million vehicles.
Japanese car makers could also suffer bigger currency losses if the dollar stays below what they had assumed for the year. On Wednesday, the dollar was trading around ¥77.80, while Nissan has assumed an average ¥80.
Nissan’s shares are the best-performing Japanese auto stock so far this year, gaining 12%. Tokyo’s transport sector subindex has risen 2%.
Before the results, Nissan’s shares ended down 1.9% at ¥846.
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First Published: Wed, Jul 27 2011. 01 34 PM IST
More Topics: Company Results | Nissan | Economy | Automaker | Japan |