Nissan's Finances Still in the Toilet

Matt Posky
by Matt Posky
nissans finances still in the toilet

Fulfilling earlier promises that the company had hit a wall and might require several years to recover, Nissan reported a 70-percent decline in quarterly operating profit on Tuesday. It also pulled back its full-year operating profit forecast by 35 percent to 150 billion yen, representing the automaker’s worst annual performance in 11 years. The business now expects to see global retail volume somewhere around 5.2 million vehicles (down from estimates 5.5 million).

“We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year,” incoming CFO Stephen Ma explained to Reuters after releasing its first-half results for 2019 (ending September 30th). That was swiftly followed by the announcement of an extraordinary shareholders meeting to decide on proposals for current directors leaving their positions ( Hiroto Saikawa, Yasuhiro Yamauchi, Thierry Bolloré) and the new director nominees.

From Reuters:

Nissan shares, down 19 [percent] this year, closed up 1 [percent] at 714.5 yen before the results announcement.

Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($275 million) in July-September 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. Nissan announced an interim dividend of 10 yen per share, down from 28.50 yen a year ago.

The company’s global vehicle sales fell 7.5 [percent] to 1.27 million in the quarter. Sales in China, its biggest market, fell 2.5 [percent], while those in the United States fell 4.5 [percent].

“Our sales in China outpaced the market, but sales in other key regions, including the U.S., Europe, and Japan underperformed,” Stephen Ma, a corporate vice president who will become chief financial officer next month, told reporters.

Years of heavy discounting, aimed at improving sales volume, is typically the answer given for why Nissan is performing so poorly. But the automaker also said the yen strengthened more than anticipated in earlier forecasts, coupled with worries about economic uncertainties surrounding the trade war, the cost of developing/manufacturing new-energy vehicles, and the probable downturn of several markets. It also had to cope with some, ahem, quality control issues and regulatory compliance expenses.

The shareholder meeting, scheduled to take place in February after Makoto Uchida replaces Hiroto Saikawa as CEO, to vote on a proposals for members of the new executive team to become company directors. The change is seen largely as a way to breathe new life into corporate management while distancing the company from executives with any ties to ousted Renault-Nissan Alliance Chairman Carlos Ghosn.

[Image: By Anton Watman/Shutterstock]

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  • Dividebytube Dividebytube on Nov 13, 2019

    Oh Nissan... I used to be such a fan boy in the 80s to early 90s, wanting to have a 300ZX TT, or a Hardbody 4WD truck, or a Maxima with a 6-speed manual. Now? A stripped down Frontier would be my only choice, or the I can't afford but only dream GT-R. Infiniti is hurting too - even though I do like the looks of the Q60 and would still pick up a Q70 even though its an "old" platform.

  • Jeff S Jeff S on Nov 13, 2019

    I might go for a stripped down Frontier--a lot of truck for a cheap price.

  • Conundrum Three cylinder Ford Escapes, Chevy whatever it is that competes, and now the Rogue. Great, ain't it? Toyota'll be next with a de-tuned GR Corolla/Yaris powerplant. It's your life getting better and better, yes indeed. A piston costs money, you know.The Rogue and Altima used to have the zero graviy foam front seats. Comfy, but the new Rogue dumps that advance. Costs money. And that color-co-ordinated gray interior, my, ain't it luvverly? Ten years after they perfected it in the first Versa to appeal to the terminally depressed, it graduates to the Rogue.There's nothing decent to buy on the market for normal money. Not a damn thing interests me at all.
  • Inside Looking Out It looks good and is popular in SF Bay Area.
  • Inside Looking Out Ford F150 IMHO. It is a true sports car on our freeways.
  • Inside Looking Out Articles like that are nirvana for characters like EBFlex.
  • ToolGuy "Ford expects to see Pro have a $6 billion pre-tax profit this year and Blue a $7 billion pre-tax profit."• That's some serious money from commercial vehicles (the 'Pro' part)