Japan Nissan EARNS
Shuji Kajiyama  /  AP
Carlos Ghosn, CEO of Nissan Motor Co. and Renault SA, introduces Nissan GT-R at the Tokyo Motor Show Thursday. Nissan reported Friday a 27 percent decline in profit for the July-September quarter on one-time expenses and higher taxes that eroded overall sales growth.
updated 10/26/2007 9:11:35 AM ET 2007-10-26T13:11:35

Nissan reported Friday a 27 percent decline in profit for the July-September quarter on one-time expenses and higher taxes that eroded overall sales growth and improved earnings in core auto operations.

Profit at Nissan Motor Co. for the fiscal second quarter totaled 120.1 billion yen ($1.05 billion), down from 164 billion yen the previous year.

Sales at Japan's No. 3 automaker surged 13 percent on year to 2.618 trillion yen ($22.9 billion), as sales grew in the U.S., Europe, Russia and China. Nissan sold 941,000 vehicles worldwide, up 6.6 percent compared with a year ago.

Nissan Chief Executive Carlos Ghosn said the company is coming out of a lull to start its next stage of growth as it expands in emerging markets and launches models, and better results can be expected soon.

"With many further exciting products to come, Nissan is back on track towards sustainable profitable growth," he said. "You can expect more in the second half."

Nissan maintained its forecast for the full fiscal year ending March 2008 at 480 billion yen ($4.20 billion) profit.

Analysts say that how the company holds up for the rest of the year may be critical.

If Nissan falls short of its targets for this fiscal year, it would be the second straight year of missing its goal, said Tsuyoshi Mochimaru, auto analyst with Lehman Brothers in Tokyo.

"And that's at a company that has built its management reputation by meeting commitments," he said, referring to Ghosn's style of setting clear goals to assess performance.

Mochimaru also believes the pressure is on Nissan because Japanese rivals, Toyota Motor Corp. and Honda Motor Co., are doing so well.

On Thursday, Honda said its profit shot up 63 percent. Toyota, running neck and neck in global vehicle sales with No. 1 General Motors Corp., reports earnings Nov. 7.

What hurt results was the absence of tax breaks the company got the same period a year ago, according to Nissan. Extra expenses for the latest quarter for an early retirement package in Japan also trimmed profits, it said.

Tokyo-based Nissan, which makes the Altima sedan, Infiniti luxury model and GT-R sports car, had fallen behind rivals in research during hard times. It marked a turnaround from near collapse under an alliance with Renault SA of France set up in 1999.

Ghosn said Nissan was investing in technology, including new engines and safety features, which are being introduced in products. Nissan is focusing on electric cars, which will be commercially mass marketed by 2012, and Nissan is preparing its original hybrid car by 2010, he said.

In the fiscal first-half, Nissan introduced seven products worldwide, including the Altima coupe and X-Trail sport-utility vehicle, and four more are in the pipeline this year, including the GT-R and Infiniti EX, the company said.

For the half-year, Nissan's profit fell 23 percent to 212.4 billion yen ($1.86 billion). Sales for the first six months of the fiscal year rose 12 percent to 5.064 trillion yen ($44.31 billion), as vehicle sales edged up 6 percent to 1.82 million vehicles around the world.

Nissan shares rose 3.2 percent 1,124 yen ($9.83) in Tokyo shortly before earnings were announced.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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