Nissan Expects Robust Earnings on Strong U.S. Sales

TOKYO, October 16, 2003; Dow Jones reported that Nissan Motor Co. , aided by a string of successful new models, expects to report relatively solid fiscal first-half results, as strong U.S. sales offset damage caused by the rising yen, Thursday's Wall Street Journal reported.

The company expects its net income for the six months ended Sept. 30 to be about 237.7 billion yen ($2.18 billion). That is down about 17% from 287.7 billion yen in the year-earlier period, but the year-earlier results were boosted by the sale of a major production site.

Nissan, which announced preliminary earnings in Tokyo, expects that profit rose slightly, excluding the effects of the 2002 gain.

Market expectations were for a profit between 220 billion yen and 234 billion yen.

Nissan will release its first-half results on Nov. 6. The results are usually little changed from its initial projections.

Nissan, Japan's third-largest car maker after Toyota Motor Corp. and Honda Motor Co. (HMC) based on unit sales, also expects operating profit of 401 billion yen for the six months ended in September, compared with 348.3 billion yen a year earlier. That follows a 8.2% increase in revenue to 3.56 trillion yen. If the forecasts hold, Nissan would have an operating profit margin - the ratio of operating profit to revenue - of 11.3%, making it one of the world's most profitable major car makers, analysts say.

The generally strong earnings forecast underscores how Nissan, which is 44.4%- owned by French car maker Renault SA, is emerging as one of the strongest car makers in the world, after barely escaping bankruptcy in the late 1990s. New models, including the Nissan Maxima sedan, the Z sports car and the Infinity G- 35, helped Nissan boost its sales volumes in every major market for the first half of its fiscal year.

Overall, Nissan's global sales volume grew 5.9% to 1.467 million vehicles in the period. The strongest growth was in the U.S., where Nissan's sales volume expanded 11% in the first half of the fiscal year.

These latest profit estimates show that Nissan is maintaining the momentum of a turnaround effort begun when France's Renault took a controlling stake in the car maker in 1999. While initial improvements came mostly from aggressive cost cutting, Nissan is now boosting profits by selling more cars and improving margins.

Solid performance from Nissan may also help alleviate concerns about the damage that the yen's recent rise against the dollar may do to Japanese car makers.