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Nissan reports 70% second-quarter profit slump, slashes full-year outlook

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By Reuters
Nissan reports 70% second-quarter profit slump, slashes full-year outlook
FILE PHOTO: Nissan logo is seen in Tokyo Motor Show in Tokyo, Japan October 24, 2019. REUTERS/Soe Zeya Tun   -   Copyright  SOE ZEYA TUN(Reuters)

YOKOHAMA (Reuters) – Nissan Motor Co Ltd <7201.T> reported a 70% profit tumble on Tuesday and cut its full-year outlook to an 11-year low, as the Japanese automaker continued to grapple with falling sales and the aftermath of the ouster of former Chairman Carlos Ghosn.

Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen (214.9 million pounds) during the July-September period versus 101.2 billion yen a year earlier.

That compared with a mean forecast of 47.48 billion yen from nine analyst estimates compiled by Refinitiv, and marked its worst second-quarter performance in a decade and a half.

Nissan, whose financial performance has been in the doldrums for nearly two years, cut its forecast for operating profit to 150 billion yen in the year through March 2020, from a previous forecast for 230 billion yen. The new forecast means earnings for the full-year will be at their worst in 11 years.

Another weak quarter from the automaker – hit by Ghosn’s arrest for financial misconduct a year ago and troubles at its North American business – is likely to heap pressure on Nissan’s newly appointed executive team when it takes over on Dec. 1.

Following the ouster of Ghosn – who denies wrongdoing – Nissan has been battered by sliding profit, uncertainty over its future leadership and tensions with top shareholder Renault SA <RENA.PA> – whose shares fell 2% to their lowest since April 2013 after Nissan’s disappointing guidance.

The automaker in the past few weeks has announced a revamp of its top ranks with younger executives, naming the head of its China business, 53-year-old Makoto Uchida, as its next chief executive, as it seeks to draw a line under Ghosn’s legacy.

Years of heavy discounting and fleet sales, particularly in the United States, has left Nissan with a cheapened brand image and low vehicle resale value as well as dented profit.

The automaker is implementing a global recovery plan under which it will axe nearly one-tenth of its workforce and cut global vehicle production by 10% through 2023 to rein in costs which it has said had ballooned when Ghosn was CEO.

(Reporting by Naomi Tajitsu; Editing by Christopher Cushing and David Dolan)