Nissan Motor Co. (NSANY) witnessed a 15% fall in profits to ¥72.3 billion ($903.5 million) or ¥17.24 (21 cents) per share in the first quarter of fiscal 2012 ending March 31, 2013, from ¥85.0 billion or ¥20.32 in the corresponding quarter last year. Reported profit also missed the Zacks Consensus Estimate of 51 cents per share.
Revenues in the quarter grew 2.6% to ¥2.14 trillion ($26.64 billion). Unit sales increased 14.6% to 1.21 million vehicles globally. Net sales grew 12.4% to ¥1.1 trillion ($13.80 billion) in Japan, 7.2% to ¥754.9 billion ($9.4 billion) in North America and 6.1% to ¥518.8 billion ($6.5 billion) in Asia. However, revenues in Europe declined 12.8% to ¥371.5 billion ($4.6 billion) during the quarter.
Operating profit in the quarter fell 20% to ¥120.7 billion ($1.5 billion) from ¥150.4 billion in the year-ago quarter. The decrease in operating income was due to unfavorable foreign currency translation, high selling costs in North America due to product renewal cycle and unfavorable pricing.
During the quarter, Nissan executed its Power 88 mid-term business plan. The program will enhance the company’s product portfolio and strengthen its brand value and sales volume around the world. The company launched Nissan Altima in the U.S. and the Nissan NV350 Caravan in Japan as a part of the program.
Nissan’s cash on hand and in banks decreased to ¥697.9 billion ($8.7 billion) as of June 30, 2012 from ¥765.4 billion as of March 31, 2011. Total debt went up to ¥2.2 trillion ($28.6 billion) as of June 30, 2011 from $2.1 trillion as of March 31, 2012.
In the first quarter of fiscal 2012, the company reported cash outflow from operating activities of ¥37.3 billion ($466.6 million) compared with a cash inflow of ¥178,563 million in the year-ago quarter.
Nissan expects to launch new products and renew major lineups across its namesake, Infiniti and Venucia brands. The company expects total sales to increase 9.5% to ¥10.3 trillion ($128.8 billion) for fiscal 2012.
Operating income is projected to surge 28.2% to ¥700 billion ($8.75 billion). Profits are expects to go up 17.2% to ¥400 billion ($5 billion) or ¥95.44 ($1.19) per share for the year.
Nissan Motor is the sixth largest automaker in the world. The company along with its subsidiaries engages in the production and sale of automotive products, industrial machinery and marine equipment, primarily in Japan, North America, and Europe. It offers passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts, as well as sales financing activities. It competes with Honda Motor Co. (HMC) and Toyota Motor Corporation (TM).
Currently, Nissan retains a Zacks #1 Rank, which translates into a short-term (1 to 3 months) Strong Buy rating. We have a long-term (more than 6 months) Outperform recommendation on the stock.
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