Nissan's net up, foresees 'headwinds'

Nissan reported a big jump in fiscal fourth quarter profit Tuesday compared with the previous year. But like other Japanese automakers pinched by a strong yen and soaring oil and material costs, it forecast a tough year ahead.

Nissan Motor Co.'s (NSANY) January-March profit rose 67% to $1.3 billion from the same period the previous year.

Those figures included one-time "fifth-quarter" numbers from overseas subsidiaries that were added to the previous year's fourth quarter to make the cutoff for fiscal years the same globally.

Without those numbers, Nissan said, the profit surge calculated to a 95% increase.

Nissan expects profit for the fiscal year ending March 31, 2009, though, to plunge 30% on year to $3.3 billion because of unfavorable currency swings, rising material costs and higher oil prices.

"There is no way we can overcome these headwinds," Chief Executive Carlos Ghosn told reporters at Nissan's Tokyo headquarters.

The same problems have hammered the forecasts of the other major Japanese automakers.

Battered by a slumping North American auto market and unfavorable currency swings, Toyota Motor Corp. (TM) is forecasting its first slip in annual profit in seven years. It says profit for the year through March 2009 will tumble 27% to $12 billion.

Honda Motor Co. (HMC), which reported record profit for the year just ended March 31, 2008, expects its profit for the current fiscal year to slip 18% to $4.7 billion.

Ghosn brushed off fears that Nissan car sales may be slumping, even in the problematic credit-crunch-plagued U.S. market.

The sales were just fine, he said, and the profit dip merely reflects currency fluctuations that erode the yen value of Nissan's overseas earnings.

Nissan's sales recently rose 3% in North America while the region's overall auto market declined by about the same rate, Ghosn said.

"In a challenging and volatile environment, Nissan demonstrated that it has reached the maturity to deliver a high level of performance," said Ghosn, who also heads Nissan's French partner Renault SA.

Renault owns 44% of Nissan.

For the fiscal year ended March 31, Nissan's profit rose about 5% from the previous year to $4.6 billion.

Nissan sold 3.77 million vehicles worldwide in that fiscal year, a rise of 8.2%. In North America, Nissan's sales totaled 1.35 million vehicles, up 1.3%.

Although sales for the year dropped 2.5% in Japan to 721,000 vehicles, they climbed 17.9% in Europe to 636,000. Sales rose a whopping 22% in other overseas markets such as China, rising to 1.06 million and surpassing the one million mark for the first time.

"All our growth is coming from emerging markets," Ghosn said, adding that established markets couldn't be expected to grow.

Ghosn also said Nissan hopes to take the lead in electric vehicles among the world's automakers. Under a new five-year business plan that covers the period to March 31, 2013, he said Nissan will introduce an electric vehicle in the U.S. and Japan in 2010, and mass-market such vehicles globally in 2012.

Nissan shares rose 3.2% to close at $9.25 in Tokyo shortly before earnings were released.