Nissan posts surprise operating profit in third quarter

Analysts had predicted a loss, but company benefits from rebound in car demand

Photograph:  Charly Triballeau/AFP via Getty Images

Photograph: Charly Triballeau/AFP via Getty Images

 

Nissan Motor trimmed its loss outlook for the fiscal year and posted a surprise operating profit for the most recent quarter, a sign the beleaguered automaker is beginning to recover from the worst of the pandemic’s impact on its already depressed sales.

Japan’s second-largest carmaker forecast a net loss of 530 billion yen (€4.2bn) for the year through March, narrower than the previously expected 615 billion yen.

Nissan posted an operating profit of 27.1 billion yen for the three months through December. Analysts had on average predicted a 46.8 billion yen loss.

Last quarter saw a recovery for the global auto market as a whole, with retail sales hitting the previous year’s levels in the US and exceeding them in China, Nissan chief operating officer Ashwani Gupta said at a briefing Tuesday. “We are gaining momentum,” he said.

Nissan is about nine months into an aggressive turnaround plan that involves slashing its global production capacity by around a fifth and churning out 12 new models in the 18 months through November to refresh its aging line-up and rouse stagnating consumer interest.

Sales of new models like the Rogue SUV, which debuted in the US in October, have been charting higher, limiting the drop in Nissan’s overall global sales to less than 10 per cent year-on-year in November and December, compared with a more than 30 per cent decline in the first half of 2020.

“These new models will be key” for the automaker, said Bloomberg Intelligence analyst Tatsuo Yoshida.

“Nissan should pick up a bit because of the new products coming out in markets like the U.S., but right now things are still dire.”

Sales for the quarter through December fell 11 per cent to 2.2 trillion yen, Nissan said in its earnings statement Tuesday.

For the full year, Nissan is forecasting sales of 7.7 trillion yen, slightly shy of the 7.8 trillion yen analysts expect.

Global auto sales are forecast to recover steadily this year to 84.4 million units from 76.8 million vehicles in 2020, IHS Markit data show. Challenges remain, not least the shortage of semiconductors that’s causing automakers worldwide to trim their output. – Bloomberg