The Nissan Sentra has helped drive strong demand for the maker, especially in the U.S. market.
Nissan saw a big surge in earnings for the latest quarter, with analysts crediting both strong sales in China and the U.S., as well as a boost from favorable exchange rates.
The second-largest Japanese maker reported a net profit of 112 billion yen, or $1.1 billion, a 37% year-over-year increase from 82 billion. The figures far and away exceeded analysts’ consensus forecast of 85 billion yen, or $835 million, according to data gathered by FactSet.
“Nissan continued to make progress in the first three months of the fiscal year as encouraging demand for new products, benefits from recent plant investments, and improving market conditions in North America, China and Europe combined to lift both revenues and profits,” said Nissan President and CEO Carlos Ghosn.
Despite its strong performance, Nissan maintained a relatively cautious view of the year ahead. It held to a forecast of 405 billion, or $4 billion, in net earnings for the full fiscal year ending next March 31, a modest 4% increase. It projects sales will rise 3%, to 10.79 trillion yen, or $106 billion.
On a unit basis, the Yokohama-based automaker sold 1.24 million vehicles worldwide during the first quarter of the new fiscal year, up 6%. Revenues increased 10%, however, to 2.466 trillion, or $24.2 billion.
(Nissan won’t wait for 2020 to begin rolling out new autonomous vehicle technologies, says CEO Ghosn. Click Here for the story.)
Nissan clearly benefited from the cheap yen which helped boost the margins on Japanese-made vehicles and components shipped abroad. It said the life was several billion yen.
But the automaker also gained ground in the U.S., where sales were up 14% and market share rose 0.5 points, to 7.9% – and where the maker is expected to deliver another double-digit sales gain in July.
(U.S. new car sales remain hot in July. Click Here for a preview of the month’s numbers.)
After several years of slumping demand in China, which is locked in a political dispute with Japan, Nissan has finally been regaining its footing, delivering a 21.1% gain for the quarter. That helped offset a slump in the home Japanese market that followed the recent increase in the national sales tax.
Nissan also benefited from the nascent recovery of the European market, and saw demand in Russia jump 31% for the quarter – though the political turmoil surrounding the heart of the old Soviet Union could create problems for Nissan and the rest of the industry in the current quarter.
Nissan is one of the dominant players in Russia, and it has been expanding its presence in other emerging markets, as well. It recently opened new plants in Brazil and Mexico and ended the most recent quarter by announcing plans to partner with Daimler AG on a new facility that will be added to the existing Nissan campus in Aguascalientes, Mexico. It will eventually produce both Mercedes-Benz models and a new line of small cars for Nissan’s luxury marque Infiniti.
(For more on the Nissan-Daimler joint venture, Click Here.)
The April to June quarter saw Nissan retain its lead in the plug-based vehicle market, total sales of the maker’s Leaf battery-electric model reaching 124,000 since its late 2009 introduction.
Nissan has also credited “synergies” from its ongoing alliance with France’s Renault for helping drive down costs – and boost margins – this year.
Honda will report its earnings tomorrow, with Toyota scheduled to deliver its numbers on August 5.