The FINANCIAL -- Nissan Motor Co. beat estimates to report a sharp 36% jump in its first-quarter net profit, backed by a weaker yen and as strong sales of sport-utility vehicles in the U.S. helped offset slowing sales in its other major market China.
Nissan, which is the first major Japanese car maker to announce results, said Wednesday its net profit in the April- June quarter rose to ¥ 152.8 billion ($1.24 billion), well above the mean estimate of ¥ 127.0 billion according to analysts surveyed by Thomson Reuters. Its first-quarter revenue was ¥ 2.9 trillion, up 17.6% from a year earlier, while quarterly operating profit margin was at 6.7%.
"Nissan delivered solid financial results in the first three months of the fiscal year primarily due to strong demand for our core products in North America and Europe," Chief Executive Carlos Ghosn said.
China, the world's biggest auto market that is grappling with a slowdown, is an important market for Nissan, where it has outsold its Japanese rivals Toyota Motor Corp. and Honda Motor Co.Nissan faces slower growth in China, but steady demand in the U.S. for profitable light trucks, including SUVs, helped offset slowing sales in China, according to Nasdaq.
Nissan posted 5.5% growth in U.S. sales for April-June, outperforming the industry's growth pace of 3.3%. In China, Nissan's April-June retail sales were slightly higher at 0.5%, but well below its January-March growth of 11.3%.
Nissan's financial year starts in April, but for its operations in China, the financial year starts in January. This means that Nissan's first quarter earnings reflect April-June results for all major regions except China, which is based on results from January-March -- the first quarter in China's financial year.
In 2015, Nissan's shares have gained the most among Japan's passenger car makers. Shares in Nissan have risen around 13% since the start of the year and closed at ¥ 1,184 on Wednesday before the earnings announcement. That compares with an around 8% gain for Toyota and 9% for Honda. The Nikkei benchmark has surged about 16% during the same period.
Honda will release its results on Friday and Toyota on August 4.
The weaker yen continues to buttress profit for Japanese auto makers including Nissan. Nissan's average foreign exchange rate for the first quarter last financial year was 102.2 yen against the dollar, but that rate for April-June this year was at ¥ 121.4. The yen is currently trading around ¥ 123 against the dollar.