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Profit warning rattles Nissan

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Profit warning rattles Nissan

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Nissan’s shares plunged in Tokyo following a massive profit warning. The carmaker’s Chief Executive Carlos Ghosn, who is credited with saving it from near bankruptcy, admitted Nissan is “in a performance crisis.” He said management has to recognise the weakness and act on it, but added “fundamentally the company is healthy.”

The shares dropped by almost 8.3%, their biggest fall in more than five years, after a worse than expected 23% slide in quarterly net profit. Nissan believes net profit for the financial year ending in March 2007 will be down by 11%. That would be its first annual drop in earning in seven years.

Nissan says the cause is higher costs for steel and energy as well as slower sales, they were down 3% worldwide between October and December and 16% lower in Europe.

Ghosn, who also heads Renault which owns 44% of Nissan, has promised to announce an emergency plan in April to reverse the profit slide.