Japan's Nissan Motor Co said its first-quarter operating profit soared 58 percent, beating forecasts, lifted by strong vehicle sales in the long-buoyant U.S. market as well as a weak yen that boosted the value of earnings overseas.
Japan’s Nissan Motor Co said its first-quarter operating profit soared 58 percent, beating forecasts, lifted by strong vehicle sales in the long-buoyant U.S. market as well as a weak yen that boosted the value of earnings overseas.
Nissan said April-June operating profit rose to 193.71 billion yen ($1.57 billion) from 122.61 billion yen in the same period a year earlier. That handily beat an average analyst estimate of 163 billion yen for Japan’s second-biggest automaker, according to Thomson Reuters data.
As fears about China’s economy roil share markets there, Nissan said sales in its second-biggest market were holding up for now, growing 0.5 percent in April-June from a year earlier, after an 11 percent surge in the previous quarter.
“The immediate situation (in China’s auto market) is tough and we can’t let our guard down,” said Nissan Senior Vice President Jun Seki.
Risks exist in the Chinese auto market even when stock markets are good, said Nissan Corporate Vice President Joji Tagawa. “I don’t think (auto sales) are linked only to stock performance…Out of the people who actually buy cars, not all of them invest in stocks.”
Nissan’s April-June net profit grew 36 percent to 152.80 billion yen as revenue rose 18 percent to 2.9 trillion yen. For accounting reasons, Nissan books its China sales in January-March in its accounts for April-June.
Despite the surge, Nissan left its financial forecasts for the year ending March 2016 unchanged, estimating operating profit for the 12 months will be 675 billion yen, up from 590 billion yen a year earlier.
Sales in the United States, Nissan’s biggest market, grew 5.5 percent in the quarter. Demand has grown so rapidly in the U.S. that Nissan has struggled to meet it.
The company said earlier this year it would begin building its popular Rogue small crossover vehicle in Japan for export to North America next spring, taking advantage of the weaker yen making exports more competitive.
A 10 percent drop in vehicle sales in Japan was the only black mark in Nissan’s earnings report. Demand for cars has long been sluggish in Japan as the country’s ageing population shrinks.