By Daniel Leussink
YOKOHAMA, Japan (Reuters) -Nissan Motor swung back to an operating profit in the second quarter, reporting its best quarterly result in more than a year on Thursday thanks to its efforts to reduce fixed costs under a turnaround plan and stronger sales in North America.
Nissan booked 51.5 billion yen ($342 million) in operating profit for the July-to-September quarter, up 61% from 31.9 billion yen a year earlier and beating a forecast for an average 70.9 billion yen loss from five analysts polled by LSEG.
The result follows a first-quarter operating loss and marked its best single-quarter finish since a 90.3 billion yen profit in the final quarter of fiscal year 2023. Its half-year result got a boost from one-time factors, including lower costs relating to U.S. emissions regulations.
SECOND HALF OPTIMISM AS TURNAROUND MOVES AHEAD
The company is expecting to book a stronger performance in the second half of the financial year on product-led growth and continuing momentum from the second quarter, CEO Ivan Espinosa told a briefing.
“We remain on track for operating profit (to) break even, excluding the tariff impact,” he said. “It’s a transition year, so absolute numbers are not great. But relative to what we said, we are on track.”
The result comes as the automaker presses ahead with a sweeping turnaround plan that includes reducing its global manufacturing plants to 10 sites from 17 and laying off 15% of its workforce.
Nissan maintained a forecast released last week for a 275 billion yen annual operating loss in the year through March 2026 due to the hit from U.S. tariffs and supply chain risks, including from problems with the supply of Nexperia chips.
SALES STRONG IN NORTH AMERICA, SLIDE IN JAPAN
Espinosa said North American sales performed strongly in the second quarter, driven by a more focused marketing effort for regionally produced models, simplified dealer programmes, and a greater emphasis on retail business over fleet sales.
In Japan, retail sales slid 16.5% in the first half, as customers worried over the company’s financial situation, Espinosa said, adding that sentiment was improving, supported by strong demand for the new Roox “kei” model.
Nissan is scaling back production of its top-selling Rogue sport utility vehicle in Japan from next week due to a short supply of chips from Dutch firm Nexperia, a person familiar with the matter told Reuters on Wednesday.
The company said it will also stop producing Nissan cars at the COMPAS plant it has run together with Mercedes-Benz in Mexico at the end of November.
It said earlier on Thursday it has concluded a 97 billion yen deal to sell and lease back its global headquarters in Yokohama.
($1 = 150.7800 yen)
(Reporting by Daniel Leussink; Editing by Tom Hogue and Joe Bavier)
