Nissan issues profit-warning; FY opg profit falls on weak sales

Nissan issues profit-warning; FY opg profit falls on weak sales - UPDATE

	Published : Fri, 02 Feb 2007 11:13 By : Agencies Print this Story

TOKYO (XFN-ASIA) - Nissan Motor Co Ltd issued a profit-warning for the full year to March 2007, on the back of sluggish vehicle sales, as it prepares to suffer its first decline in operating profit in seven years.

Japan's second-largest automaker said its operating profit in the fiscal third-quarter ended Dec 31 tumbled 16.6 pct from a year earlier to 183.06 bln yen, as global retail sales tumbled 2.7 pct from a year earlier to 149,000 vehicles in the three months.

Nissan said due to a lack of new model launches, its global auto production dropped in 11 of the past 12 months to December.

The automaker also attributed its poor top-line performance to higher procurement costs, rising energy prices and stiff competition.

After reporting a weaker performance for the third quarter, Nissan said it now expects to post an operating profit of 775 bln yen for the full year, after having previously projected 870 bln yen in operating income.

It also cut its year to March net profit estimate to 460 bln yen from 523 bln forecast previously.

In the year to March 2006, Nissan earned operating income of 871.8 bln yen.

In issuing the profit-warning, Nissan president Carlos Ghosn said in a prepared statement that he plans to work out 'fresh measures' to revive the automaker's profitability and present them in April when the firm releases its full-year results.

Despite the tumble in operating income in the October-December period, net profit for the nine months to December rose 3.5 pct from a year earlier to 378.6 bln yen, on revenue which rose 1.2 pct to 6.88 trln yen, thanks to the sale of its equity interest in Nissan Diesel Motor to Volvo of Sweden.

Net earnings fell to 104.4 billion yen in the three months to December, as revenue rose 1.8 pct from a year earlier to 2.34 trln yen, Nissan said.

'Against an environment of high raw material and energy prices, no pricing power and continuing weakness in mature markets, our industry faced many head-winds,' said Ghosn.

'This unfavorable and adverse external environment combined with internal factors to create a challenging period for our company.'

Nissan's global sales fell 5.7 percent in the nine-month period to 2,504,000 vehicles, hit by sluggish demand in markets across Japan, the United States and Europe.

Nissan issues profit-warning; FY opg profit falls on weak sales - UPDATE