Nissan Motor Co. said Friday that its net profits surged almost 27 percent in the third quarter, snapping a one-year downturn as new model launches boosted demand in a sluggish global economy.
But Nissan, Japan's third-largest automaker, kept its cautious outlook for the full-year, noting that slowing economic growth and financial market turmoil were keeping a lid on demand in the giant US auto market.
Nissan's net profit came to 132.22 billion yen (1.24 billion dollars) in the three months to December, marking the first increase in five quarters.
Operating profit rose by 15.8 percent to 211.94 billion yen as revenue grew by 18.2 percent to 2.77 trillion yen, a company statement said.
“Despite the headwinds that affect our industry, Nissan has benefited from the success of the new products launched during the past 12 months,” chief executive Carlos Ghosn said in a statement.
“Although the market outlook remains volatile for the coming months, Nissan is focused and on track to deliver our full year objectives,” he added.
Nissan's global sales rose 13 percent in the third quarter to 898,000 vehicles, following the launch of nine models in the first nine months of 2007 including the X-Trail compact sports utility vehicle and the Altima coupe.
Sales rose 5.1 percent in the US and by 12.5 percent in Europe, but fell by 0.9 percent in Japan.
With Japan's population greying and shrinking, the country's automakers are relying increasingly on overseas markets to power their growth.
Japanese automakers have enjoyed brisk sales in the United States, helped by their cars' environmentally friendly credentials.
But with the subprime loan crisis weighing on the US auto market, emerging economies such as Brazil, Russia, India and China are becoming ever more important for Nissan and its rivals.
In the United States, “the environment has been quite difficult,” said corporate vice president Joji Tagawa.
“The truck market remains sluggish in the United States and the overall US the economy is facing difficulties.”
But at the same time, “there was a significant jump in sales in Russia,” he said.
It was a much better performance by Nissan in the third quarter than in the first half of the fiscal year, when net profits had slumped by 22.5 percent due to higher taxes and weak domestic sales.
The weak first-half performance was a drag on nine-month net profits, which fell 9.0 percent to 344.64 billion yen.
Operating profit rose 8.9 percent to 579.08 billion yen in the first three quarters of the fiscal year as revenue increased by 13.9 percent to 7.83 trillion yen.
Nissan kept its forecast for an annual net profit of 480 billion yen, up 4.2 percent from the previous year, when it reported the first drop in profits under its onetime saviour Ghosn, who now heads both Nissan and Renault.
Nissan, which was overtaken by Honda in 2006 in terms of sales, sees a 3.0 percent rise in operating profit in the current fiscal year to March to 800 billion yen and a 1.6 percent drop in revenue to 10.3 trillion yen.
“Clearly the US market is going through some turmoil right now. It has a lot of challenges ahead of it for 2008,” said Nissan spokesman Simon Sproule.
Japan's largest automaker Toyota Motor Corp. reports its third-quarter results on Tuesday, with analysts predicting a record operating profit, lifted by brisk sales in emerging markets.
“Strong sales growth in emerging markets helped compensate for sluggish sales in Japan and flat sales in North America as well as the appreciation of the yen against the dollar,” said Okasan Securities analyst Yasuaki Iwamoto.
