Nissan Expects Full-Year Profit on Rising Sales (Update2)

February 09, 2010, 04:31 AM EST
(Adds Renault shares in seventh paragraph.)

By Kiyori Ueno and Tetsuya Komatsu

Feb. 9 (Bloomberg) -- Nissan Motor Co. predicted a return to profit this fiscal year, scrapping an earlier loss estimate, citing government incentives that boosted demand for the company’s vehicles in China and Japan.

Japan’s third-largest carmaker expects net income of 35 billion yen ($391 million) in the year ending March 31, compared with an earlier forecast of a 40 billion yen loss, it said in a statement today in Yokohama, Japan, where Nissan is based.

Nissan follows bigger rivals Honda Motor Co. and Toyota Motor Corp. in improving its earnings outlook. The maker of Teana sedans may also benefit after Toyota recalled about 8 million vehicles globally, tarnishing its reputation.

“I would say for the moment that Nissan has the edge over Toyota,” Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. in Tokyo, said in a Bloomberg Television interview before the earnings announcement. “They have been doing very well.”

Nissan benefited from tax cuts and government subsidies in China, the world’s biggest auto market, and in Japan. It boosted its full-year vehicle sales estimates to 756,000 in China from 712,000 and to 625,000 in Japan from 612,000. In North America, Nissan increased its sales forecast to 1.045 million vehicles from 1 million.

Quarterly Profit

The company posted net income of 45 billion yen for the third quarter, compared with a median estimate of a 27.2 billion yen profit by four analysts surveyed by Bloomberg. Global sales rose to 2 trillion yen from 1.82 trillion yen a year earlier, the company said in the statement.

Nissan rose 2.4 percent to 731 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange, before the earnings announcement. The shares have declined 9.8 percent this year. Renault SA, which owns 44 percent of Nissan, rose as much as 3.1 percent of 9:55 a.m. in Paris trading.



Chief Operating Officer Toshiyuki Shiga said on Feb. 1 that accelerator pedals in Nissan cars made by the same supplier that triggered recalls at Toyota aren’t defective. CTS Corp. pedals used by Nissan differ in structure and materials from those used by Toyota, he said.

Nissan will roll out its first battery-powered car, the Leaf, this year in Japan, the U.S. and Europe. Chief Executive Officer Carlos Ghosn predicts electric vehicles will account for 10 percent of global car sales by 2020.

The carmaker posted a net loss of 233.7 billion yen for the fiscal year ended March 31, 2009.


--Editors: Terje Langeland, Patrick Harrington

To contact the reporters on this story: Kiyori Ueno in Tokyo at +81-3-3201-3844 or kueno2@bloomberg.net; Tetsuya Komatsu in Tokyo at +81-3-3201-3370 tekomatsu@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at +81-3-3201-8362 or kinoue@bloomberg.net

source: website..Bloomberg