Nissan quarterly operating profit surges 20%
YOKOHAMA, Japan -- North America powered Nissan Motor Co. to a 20 percent surge in global operating profit in the latest quarter thanks to hot-selling crossovers.
Operating profit at Japan’s second-biggest automaker climbed to 205.7 billion yen ($1.83 billion) in the company’s fiscal fourth quarter ended March 31.
Net income, however, tumbled 40 percent to 71.0 billion yen ($631.3 million) in the January-March period. Nissan attributed the decline to an extraordinary charge booked to cover the spiraling costs of recalling defective airbag inflators made by Takata Corp.
Worldwide revenue dipped 1.2 percent to 3.25 trillion yen ($28.90 billion) in the quarter, despite a 3.4 percent global sales increase to 1.532 million vehicles.
Announcing the earnings Thursday, CEO Carlos Ghosn said the company was making good progress toward his Power 88 mid-term business plan goals. They target global operating profit margin of 8 percent and 8 percent market share by March 31, 2017.
In the just-ended fiscal year, Nissan’s operating margin jumped to 7.0 percent, from 5.8 percent the year before. But getting to 8 percent by next spring may be tougher as growth in the U.S. moderates and foreign exchange rates begin to bite into earnings.
“We’re on the right path,” Ghosn said. “The 8 percent operating margin is something which is very strict, very solid, which is central … We will try to get as near to 8 percent as possible. I think it’s too early when we are in May 2016 to try to imagine what’s going to be the outcome. Let’s wait for the end of the game.”
North America gains
North America anchored Nissan’s robust overall results as the Japanese automaker’s biggest and most profitable market.
Regional operating profit climbed 34 percent to 106.6 billion yen ($947.8 million) in the company’s fiscal fourth quarter. Volume climbed 9.5 percent to 521,000 vehicles.
Nissan cashed in on the Rogue crossover as well as the Altima and Sentra sedans, Ghosn said. The company is expecting to gain momentum in the profitable truck segment with introductions of new variants of its Titan pickup this year year. To feed the demand, Nissan began building Rogues in Japan this spring to export to the U.S.
Global annual results
For the full year, Nissan’s operating profit grew 35 percent to 793.3 billion ($7.05 billion), while its net income grew 15 percent to 523.8 billion yen ($4.66 billion).
Revenue increased 7.2 percent to 12.19 trillion yen ($108.38 billion), supported by a 2 percent increase in sales to 5.42 million vehicles.
North American sales increased 4.6 percent to 1.825 million vehicles last year.
Looking ahead, Nissan expects the strengthening Japanese yen to undermine earnings. Operating profit is expected to fall 11 percent to 710.0 billion yen ($6.31 billion) in the current fiscal year ending March 31, 2017. Net income is forecast to essentially flatline, inching ahead just 0.2 percent to 525.0 billion yen ($4.67 billion). Nissan said it is bracing for 255.0 billion yen ($2.27 billion) hit from foreign exchange losses.
The company sees revenue sliding 3.2 percent to 11.8 trillion yen ($104.92 billion), while global retail sales expand 3.3 percent to 5.6 million vehicles.
North American sales are expected to grow 2.9 percent to 2.07 million vehicles this fiscal year, while U.S. sales advance 3.5 percent to 1.57 million vehicles, Nissan said.