Nissan's Net Down on Items, But Operating Profit Surprises

Nissan reported a 27% decline in fiscal second-quarter net income to ¥120.1 billion ($1.01B) due to higher taxes and a one-off gain from the sale of shares of Nissan Diesel to Volvo AB. However, operating profit growth of 12% to ¥218.7B surprised to the upside, while sales rose 13% to ¥2.62T. Nissan maintained its full-year outlook for group operating profit of ¥800B and net income of ¥480B. CEO Carlos Ghosn appeared confident Nissan will reach its fiscal target of 3.7 million global vehicle sales. Nissan sold 1.82M vehicles in the first-half. Mr. Ghosn said he doesn't expect any negative impact on the company's sales this year from the subprime mess and a weakening U.S. market. Overseas, Nissan benefited from strong demand in Russia, China and the Middle East. Mr. Ghosn predicted the yen won't change much against the dollar over the rest of the current fiscal year. Ordinary shares of Nissan rallied 3.2% to ¥1,124, ahead of its earnings release, on the heels of Honda's strong earnings report Thursday. Nissan's ADRs gained 1.1% to $19.40 on Thursday.

Sources: Press release, Bloomberg, Reuters, Wall Street Journal
Commentary: U.S. Sept. Auto Sales Down, But Better Than Expected • Toyota Loses Top Reliability Ranking • Toyota Loses Top Reliability Ranking
Stocks to watch: NSANY. Competitors: TM, HMC, GM, F
Related: Nissan Investor Relations FQ2 earnings materials

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