Nissan quarterly profit jumps 78 percent

[February 09, 2011]  TOKYO (AP) -- Nissan reported a 78 percent jump in quarterly profit and raised its full-year forecasts Wednesday as vehicle sales grew in North America, Europe and Asia, offsetting a weak performance in Japan.

Nissan's October-December net profit totaled 80.07 billion yen ($976.4 million), up from 44.97 billion yen a year earlier. Helping the Japanese automaker's bottom line was a better performance at Renault, in which Nissan owns a 15 percent stake. Cost cuts and improved model offerings were additional pluses.

Sales for Nissan's fiscal third quarter rose 5.3 percent to 2.103 trillion yen ($25.6 billion).

Nissan Motor Co., which became Japan's No. 2 automaker last year, overtaking Honda Motor Co., was upbeat after the better-than-expected performance.

The maker of the Leaf electric car, March subcompact and Infiniti luxury models now expects 315 billion yen ($3.8 billion) in profit for the year through March. That would be a more than sevenfold surge from the previous fiscal year.

Yokohama-based Nissan had previously forecast an annual profit of 270 billion yen ($3.3 billion).

"Our financial results are evidence that Nissan continues to deliver solid performance," said Nissan President and Chief Executive Carlos Ghosn.

The good news for Nissan came from its aggressive push for growth in fast-growing markets such as India and China. But it was also able to boost sales in more established markets like North America and Europe. Only Japan proved to be a weak spot.

Ghosn acknowledged rising material costs and a strong yen, which erodes the value of overseas earnings for Japanese exporters, remained risks in the months ahead.

Nissan raised its vehicle sales forecast for the full year to 4.165 million vehicles from 4.1 million vehicles. The latest forecast would mark a 19 percent increase from 3.5 million the previous fiscal year.

Nissan -- 43 percent owned by its 12-year alliance partner Renault SA of France -- also raised its sales forecast for the fiscal year to 8.8 trillion yen ($107.3 billion) from 8.77 trillion yen ($107 billion), and higher than the 7.5 trillion yen reported in the previous year.

"We will continue to deliver good results while remaining focused on our strategies to pursue profitable growth," said Ghosn, also chief executive at Renault.

Nissan used to be frequently criticized as lagging behind Toyota Motor Corp. with its hit Prius hybrid in green vehicles. It has boosted its green credentials with its Leaf electric vehicle, which started being delivered to customers late last year.

The Leaf is one of the world's first mass-produced affordable electric vehicles. Although numbers sold are tiny, the car is already delivering a significant image perk for Nissan.

For the latest quarter, Nissan sales improved in almost all major regions, except for Japan, where the end of government-backed incentives for green cars crimped sales.

Declining Japan sales as well as an unfavorable exchange rate were partly behind the 15 percent slide in October-December operating profit. The dollar now trades at about 82 yen, down from about 90 yen a year ago.

Nissan's net profit outdid those announced recently by Honda and Toyota, which reported weaker quarterly results but raised their full year forecasts, citing a global auto recovery and cost cuts.

For the first nine months of the fiscal year, Nissan's profit shot up to 288.4 billion yen from 54 billion yen a year earlier. Nine-month sales rose 19.4 percent to 6.42 trillion yen.

Nissan stock gained 2.5 percent to 893 yen ($10.9). Results were announced after trading ended on the Tokyo Stock Exchange.

[Associated Press; By YURI KAGEYAMA]

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