YOKOHAMA, Japan — A rebound in Europe helped to boost net income at Nissan by 5 percent in the January-March quarter. Surging North American operating profit also fueled the company's earnings.
Net income increased to 114.9 billion yen ($1.12 billion) in the company’s fiscal fourth quarter, from 109.7 billion yen ($1.07 billion) a year earlier, the company said today.
Revenue gained 21 percent to 3.20 trillion yen ($31.13 billion), from a year earlier, as worldwide sales advanced 18 percent to 1.52 million vehicles.
Robust sales and profits from North America, Nissan’s biggest and most profitable market, drove overall results higher and offset weaker business in Europe and Japan. Nissan’s U.S. sales have outpaced total market growth, handing it new market share.
North American operating profit soared 73 percent to 104.0 billion yen ($1.01 billion) in the three-month period, from 60.1 billion yen ($584.6 billion) a year earlier.
Regional sales climbed 11 percent to 443,000 vehicles.
Nissan’s European business rebounded to a tiny 300 million yen ($2.9 million) operating profit in the fourth quarter, from an 11.9 billion yen ($115.8 million) loss the year before.
Nissan's vehicle sales in the EU and EFTA markets increased 7 percent to 129,943 in the January to March period for a 3.9 percent market share in a total market up 8 percent, according to industry association ACEA. The rollout in the quarter of the latest generation Qashqai compact crossover, the automaker's best-selling European model, helped to boost sales.
But Europe remained Nissan’s weakest major market, swinging to an operating loss of 23.6 billion ($229.6 million) for the fiscal year, after generating a thin profit the year before.
CEO Carlos Ghosn said a focus on brand image and product launches bolstered both sales and profits in North America. He cited the redesigned Rogue crossover, which went on sale last year and is the first vehicle based on a new commonized Renault-Nissan platform, as the kind of vehicle that will drive results.
“The U.S. looks good for us,” Ghosn said.
U.S. market share is still below Ghosn’s target of 10 percent. But in the first three months of the year, Nissan North America’s market share rose to 9.5 percent, from 8.6 percent a year earlier. Ghosn wants 10 percent in the fiscal year ending March 31, 2017, as part of his Power 88 business plan.
“You’re going to see us continuously be on the offensive in the U.S. until we reach this first milestone of 10 percent,” Ghosn said while announcing financial results.
Ghosn’s upbeat assessment was a dramatic turnaround from just a year ago, when U.S. sales missed expectations and prompted Ghosn to call the United States his biggest “disappointment.”
For the full year ended March 31, net income increased 14 percent to 389.0 billion yen ($3.78 billion), while operating profit added 14 percent to 498.4 billion yen ($4.85 billion).
Revenue increased 20 percent to 10.48 trillion yen ($101.9 billion). Sales climbed 6 percent to 5.19 million vehicles.
The weakening Japanese yen chipped in a windfall gain of 247.6 billion yen ($2.41 billion) in the fiscal year. The yen has dropped about 20 percent against the dollar over the past year.
The currency’s depreciation increases the value of overseas earnings when they are repatriated to Japan and making Japan-made vehicles more competitive on the international market.
Looking to the current fiscal year that began April 1, Nissan expects sales to increase 7 percent to 5.65 million units.
Slumping volume in Japan will be offset by growing sales in all other markets, Nissan predicted.