Nissan Sees Profits on New Launches - Analyst Blog

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Nissan Motor Co. ( NSANY ) posted a 7% increase in profits to ¥341.43 billion ($4.32 billion) or ¥81.67 ($1.03) per share in fiscal 2011 ended March 31, 2012 compared with ¥319.22 billion or ¥76.44 in the prior fiscal year. However, the EPS was lower than the Zacks Consensus Estimate of $1.88.

Sales in the quarter appreciated 7% to ¥9.41 trillion ($118.95 billion) in the year. Operating profit inched up 2% to ¥545.84 billion ($6.90 billion) from ¥537.47 billion in fiscal 2010.

The improvement in revenues and profits was attributable to strong demand for the company's vehicles, frequent product launches during the year and market expansion programs. The company believes investments in manufacturing capacity expansion, particularly in China, North America, Brazil and Russia, will enhance sales volume of the company.


The company released five new models during the year including Tiida in China, Lafesta Highway Star in Japan, front-drive and rear-drive versions of the NV400 commercial van in Europe and the Infiniti JX in the U.S.

Due to these factors, the automaker recovered earlier from the disruptions caused by the twin disasters in Japan and severe flooding in Thailand last year compared with its domestic rivals, Toyota Motor Corp. ( TM ) and Honda Motor Co. ( HMC ).

In the fiscal year, Nissan's global sales totaled 4.85 million units, up 16% from 4.18 million units last year. With this, the company has outperformed the growth in total industry volumes of 4.2% to 75.7 million units from 72.6 million units in fiscal 2010. Globally, it acquired a market share of 6.4% during the year, up 0.6 percentage points from the prior year.

Nissan's sales in its largest market, China, improved 22% to 1.25 million units. Meanwhile, its sales rose 12% to 1.08 million units in the U.S., 17.5% to 713,000 units across Europe (including Russia), 9% to 655,000 units in Japan and 16% to 826,000 units in Other markets.

For fiscal 2012 ending March 31, 2013, Nissan expects revenues of ¥10.3 trillion ($125.61 billion) based on a 10.4% increase in unit sales to 5.35 million. The company plans to launch 10 products globally including Altima, Pathfinder, Sylphy/Sentra, NV350 Caravan and a long wheelbase version of the Infiniti M hybrid sedan. It has aimed for product launches averaging every six weeks and expand its Infiniti and light commercial vehicle businesses.

The company also anticipates operating profit of ¥700 billion ($8.54 billion) and net income of ¥400 billion ($4.88 billion) for the year. The company has succeeded in cutting purchasing costs by 5% annually and aims to reduce total costs by 5% each year.

Nissan Motor, founded in 1933 and headquartered in Yokohama-shi, Japan, together with its subsidiaries, engages in the manufacture and sale of automotive products, industrial machinery and marine equipment primarily in Japan, North America, and Europe. The company offers passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts, as well as sales financing activities.

Due to better than expected recovery, promising results and clear-cut outlook, the company currently retains a Zacks #2 Rank on its stock, which translates to a short-term (1 to 3 months) rating of Buy.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: HMC , NSANY , TM

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