Nissan posts $380 million quarterly profit

AP News
Posted: May 12, 2011 7:13 AM
Nissan posts $380 million quarterly profit

Nissan rounded out a record year for car sales by returning to profit in the fourth quarter but Chief Executive Carlos Ghosn acknowledged serious challenges from Japan's natural disasters.

The good news Thursday was clouded by uncertainties due to the damage from Japan's earthquake, tsunami and nuclear crises that have disrupted production for Nissan and other Japanese automakers.

Nissan Motor Co., allied with Renault SA of France, reported a 30.77 billion yen ($380 million) profit for January-March, a turnaround from a 11.6 billion yen loss a year earlier. Quarterly sales jumped 10 percent to 2.35 trillion yen ($29 billion)

Ghosn said production at Nissan plants worldwide will be back at pre-disaster levels by October, after which the company will make up for lost production.

He did not give an earnings forecast for the current fiscal year through March 2012, but promised projections would be ready by a shareholders' meeting in June.

Ghosn said Japan's second biggest automaker was working on restoring full production. The magnitude-9.0 earthquake and tsunami on March 11 destroyed key auto parts makers in northeastern Japan and killed more than 25,000 people.

On Wednesday, Toyota Motor Corp. said fixing its production problems was moving faster than initially expected, although it did not give a date for a full recovery.

"Nissan is once again proving its resilience in the face of adversity," Ghosn said.

He acknowledged overseas rivals were likely to snatch market share away while Nissan struggles to fix production.

But momentum was in Nissan's favor, given the sales achievements and market gains for the year just ended, he said.

For the fiscal year through March 2011, profit at Nissan, which makes the Leaf electric vehicle and the March subcompact, totaled 319.2 billion yen, more than seven times what it earned the previous year when Nissan was still recovering from the global financial crisis.

Annual sales jumped nearly 17 percent to 8.77 trillion yen ($108 billion)

Nissan sold 4.185 million vehicles for the fiscal year, up 19.1 percent from 3.515 million the previous year. The global auto industry had grown a smaller 12.6 percent during that period.

Nissan's sales in China, its largest single market worldwide, reached a record 1.02 million vehicles for the fiscal year, up 35.5 percent. Although Nissan sold fewer vehicles in Japan year-on-year, sales were up in the U.S., Europe and South America, according to Nissan.

The automaker's U.S. sales rose 12.2 percent from a year earlier in April, riding on the back of the popularity of the Altima sedan, in contrast to Toyota, whose reputation has been hurt by massive recalls. Toyota's U.S. April sales gained just 1 percent.

Toyota's quarterly profit plunged by more than 75 percent, despite doubling its annual earnings. Honda Motor Co. reported a quarterly profit drop of 38 percent, and doesn't expect to return to full production in Japan until the end of the year.

Ghosn said Nissan suffered from the March 11 earthquake and tsunami, including the deaths of five employees, pausing at the start of the news conference to ask that all deaths from the disaster be remembered.

But Nissan was showing it can bounce back, he told reporters at Yokohama headquarters.

The company is preparing for the risk of further electricity shortages in Japan, he said.

The tsunami sent one nuclear plant to the brink of a meltdown, and safety concerns have prompted the government to ask that another nuclear plant be shut down, possibly creating severe power shortages, especially in summer months when demand shoots up.

Nissan will conserve energy and is considering adding nighttime production and in-house generation, said Ghosn.

Nissan is also addressing fears about radiation contamination. In March, Nissan began testing radiation levels of its products before shipping and confirming their safety.

"Our recovery is going smoothly and robustly," Ghosn said. "Fiscal year 2010 was a record year for Nissan in terms of sales and growth."

Nissan shares rose 1.4 percent to 795 yen in Tokyo trading, shortly before earnings were announced.


Yuri Kageyama can be reached at