Nissan’s Operating Profit Skids 21%

November 08, 2018 at 10:32 AM

Nissan Motor Co. reports that its operating profit in the fiscal second quarter ended Sept. 30 plunged 21% to 101.2 billion yen ($890 million).

The company says a 35% drop in operating income in Japan offset a 13% gain in North America. Net profit shrank 8% to 130.4 billion yen ($1.1 billion).

Revenue for the period declined 3% to 2.8 trillion yen ($24.8 billion), wholesales fell 10% to 956,000 units, and retail sales slipped 1% to 1.37 million units. Wholesale volume, upon which the company generates revenue, fell 2% in Japan and 11% overseas in July-September.

Nissan says unfavorable exchange rates cut profits by 30 billion yen ($264 million). The company also notes that higher materials costs and increased spending on new technologies also hurt operating profits.

Conceding that further challenges lie ahead, Nissan nevertheless affirms it previous guidance for full fiscal year results. The company anticipates a 3% gain in unit sales to 5.93 million vehicles. But it predicts 6% shrinkage in its operating profit and a 33% drop in net income.