Nissan Motor Co. delivered an unexpectedly upbeat financial report Wednesday, not only announcing a profit for the April-June quarter but also upping its earnings outlook for the entire year.
The automaker has posted some of its worst losses in a decade recently, and was signaling that it would likely continue struggling in the red.
Instead, “We have delivered a strong performance in the first three months of our new fiscal year,” said Nissan Chief Executive Makoto Uchida. The company, he told reporters, is “regaining its shine.”
Still plenty of clouds on the horizon
Things aren’t entirely upbeat, however. The second-largest Japanese automaker warned the global shortage of microchips is having a sharp impact on global sales that will be felt on the bottom line for the current three-month period, Nissan’s second fiscal quarter.
At a meeting with reporters at Nissan headquarters, Nissan Chief Operating Officer Ashwani Gupta cautioned, “Nobody has a crystal ball. Nobody. But there are some assumptions” that the worst of the crisis may be over.
The semiconductor shortage was triggered by the COVID-19 pandemic, automakers sharply cutting back chip orders as they expected to see car sales plunge. But the downturn was less severe and shorter-lived than forecast. So, when they began ramping up assembly operations again companies like Nissan discovered that semiconductor manufacturers had found new customers — primarily the consumer electronics industry. Short on supplies, automakers around the world slashed production this year.
Sales forecast holds
In May, CEO Uchida warned Nissan would have to cut production by about 500,000 vehicles this year. During Wednesday’s news conference, company officials remained bullish they won’t have to make further cuts and will hold to a global sales goal of 4.4 million vehicles this year.
Nissan sold 1.05 million vehicles during the latest quarter, a full 63% jump from a year earlier — when the industry was mired in the depths of a COVID slump. Sales in North America were up 70%, with demand in China rising 71 percent.
It helped that Nissan has been launching an array of all-new or heavily updated products, including the compact Rogue SUV and the bigger Pathfinder. If anything, the 2021 calendar year is launching one of the biggest product assaults the troubled company has had in some time. It also has updated Nissan-badged models such as the Frontier pickup and full-size Armada SUV, as well as the Infiniti QX60, with the brand-new QX55 sport-utility vehicle joining the luxury division’s line-up.
By the numbers
For the quarter ending June 30, Nissan reported an operating profit of 75.68 billion yen, or $688.6 billion. The company previously signaled it would be in the red, and analysts polled by Refinitiv SmartEstimates forecast a consensus loss of 42.72 billion yen.
The company previously indicated an expectation of just breaking even for the full year ending March 31, 2022. Now, however, it is forecasting an operating profit of 150 billion yen, or $1.4 billion.
Ghosn, Ghosn, gone
The new and updated products Nissan is launching this year are a critical part of a campaign to rebuild the company’s image. It was battered by the November 2018 arrest of former CEO and Chairman Carlos Ghosn on allegations of fiscal irregularities. That scandal continues to drag on, however. Ghosn was able to flee to his family’s native home in Lebanon late in 2019.
But one former colleague remains on trial in Japan and others involved in his escape have faced their own legal headaches. That includes two Americans who masterminded the effort to sneak Ghosn out of Japan by hiding him inside a cargo container.