Yen fall boosts Nissan quarterly earnings to $820M
Nissan's quarterly profit jumps 14 percent as cheap yen offsets China sales damage
A man walks outside Nissan Motor Co.,'s head office in Yokohama, near Tokyo, Thursday, July 25, 2013. Nissan's quarterly profit jumped 14 percent to 82 billion yen ($820 million) as better sales in the U.S. and a perk from a favorable exchange rate offset damage from a sales slump in China and Europe. (AP Photo/Koji Sasahara)
TOKYO (AP) -- Without doing much different, Nissan made its shareholders a lot more money last quarter.
The Japanese automaker's April-June profit jumped 14 percent from the previous year to 82 billion yen ($820 million) and its operating earnings, which factor out its tax bill and one-time quirks, increased even more strongly.
It had better sales in the U.S. but faced headwinds in Japan, China and Europe where sales languished. But those regional differences were footnotes Thursday when the maker of the Infiniti luxury model, March subcompact and Leaf electric car announced its results.
Like other Japanese exporters, it is getting a big perk from the weaker yen, which boosts the value of overseas earnings brought home.
The dollar rose to near 100 yen during much of the April-June period this year from 80 yen levels the same quarter last year, adding nearly 70 billion yen ($700 million) in quarterly operating profit for Yokohama-based Nissan.
It is continuing to trade around 100 yen, but Nissan President and Chief Executive Carlos Ghosn has called that level "neutral."
Years of a strong yen put the Japanese at a disadvantage against powerful Korean rival Hyundai Motor Co., which has been grabbing market share. But Japanese government policies that began late last year called "Abenomics," after Prime Minister Shinzo Abe, have weakened the yen.
Overall sales for Nissan's fiscal first quarter surged 18 percent to 2.23 trillion yen ($22 billion).
Nissan left unchanged its outlook for the fiscal year through March 2014 at 420 billion yen ($4.2 billion) profit, up 23 percent from the previous year. Nissan also stuck to its global sales forecast of 5.3 million vehicles, an increase of nearly 8 percent.
"Market conditions were challenging in the first quarter, but our results were in line with our expectations," Ghosn said. "Nissan is on track to deliver its full-year guidance."
Sales of Japanese auto brands in China suffered after anti-Japanese sentiment flared last year during a territorial dispute over tiny uninhabited islands.
China sales in January through March plunged 15 percent compared with the previous year, but the fall was smaller for April-June at just 1 percent, according to Nissan.
Nissan was upbeat about global sales prospects for the rest of the year because of model launches planned in coming months, such as the Rogue crossover and Infiniti Q50 in the U.S., where Nissan has been gaining market share.
Nissan sold 1.17 million vehicles around the world for the first fiscal quarter, slipping 3.3 percent from 1.21 million the previous year. Sales fell in Japan, China and Europe, while growing 20 percent in the U.S.
Toyota Motor Corp. and Honda Motor Co. reports earnings next week.
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