Nissan Quarterly Earnings Plunge 54%

TOKYO (AP) _ Nissan's profit plunged 54 percent in the January-March quarter, contributing to its first drop in annual profit in seven years _ the first such setback under the leadership of Carlos

Thursday, April 26th 2007, 7:40 am

By: News On 6

TOKYO (AP) _ Nissan's profit plunged 54 percent in the January-March quarter, contributing to its first drop in annual profit in seven years _ the first such setback under the leadership of Carlos Ghosn, who salvaged the Japanese automaker from collapse.

Group net profit at Nissan Motor Co. for the quarter through March 31 totaled 70.6 billion yen ($595 million), down from 152.4 billion yen, as job reduction costs and higher taxes offset improved sales. Quarterly sales rose 7 percent to 2.8 trillion yen ($23.6 billion).

The big problem at Nissan, which makes Infiniti luxury models, Altima sedans and Z sportscars, has been faltering sales in important markets at a time when offerings from Japanese rivals Toyota Motor Corp. and Honda Motor Co. are hot-sellers.

Nissan also has been slow to offer hybrid models powered by gas engines and electric motors. Hybrids still don't sell in big numbers but are critical symbols for an automaker's image as environmental and cutting-edge.

For the just-ended fiscal year, Nissan's profit fell 11 percent to 460.8 billion yen ($3.9 billion).

Japan's No. 3 auto company sold 3.48 million vehicles during the fiscal year, down 2.4 percent from the previous year, as vehicle sales dropped 12 percent in Japan, and 4 percent in the U.S.

Higher raw material costs and a lack of new models hurt Nissan's performance, Nissan Chief Executive Ghosn told reporters.

Ghosn has been credited with engineering a dramatic turnaround at the Japanese automaker since a 1999 alliance with Renault SA of France, which owns 44 percent of Nissan.

But the latest results are the first major stumble for Ghosn since he took helm at Nissan as chief executive in 2001, nearly single-handedly salvaging it from near-bankruptcy. Ghosn also now serves as chief executive of Renault.

Ghosn assured reporters Nissan was undergoing efforts to revive its business, including trimming jobs in Japan and the U.S., revamping dealerships, investing in research and planning model rollouts that he said will wrest the company out of its troubles.

But he acknowledged Nissan may need to make up for lost time when it was not able to invest in research for technology as much as it had wanted while undergoing hard times.

``We remain focused on our long-term goals,'' Ghosn said, adding that better times were ahead for Nissan.

Nissan is forecasting profit will grow more than 4 percent to 480 billion yen ($4 billion) in the current fiscal year through March 2008 on 10.3 trillion yen ($87 billion) sales.