Nissan doubles quarterly operating profit despite semiconductor shortage

TOKYO — Nissan Motor Co.’s operating profit nearly doubled in the last quarter as cost control, better pricing power and lower incentives supported results despite the ongoing semiconductor crisis , prompting the automaker to raise its full-year earnings outlook.

Operating profit jumped to 52.2 billion yen ($453.5 million) in the automaker’s third fiscal quarter ended Dec. 31, from 27.1 billion yen ($235.4 million ) a year earlier, COO Ashwani Gupta said Tuesday when announcing the company’s financial results.

Nissan also returned to a quarterly net profit of 32.7 billion yen ($284.1 million), reversing a net loss of 37.8 billion yen ($328.4 million) the previous year, a the automaker said in a statement.

Revenue fell 0.8% to 2.21 trillion yen ($19.2 billion) in the October-December period as global sales fell 16% to 904,000 vehicles thanks to a crimped production.

During the fiscal third quarter just ended, North American sales fell 19% to 262,000 units. But regional operating profit jumped nearly six-fold to 85.1 billion yen ($739.4 million) during the period, due to lower incentives, a better mix of models and a favorable exchange rate.

Sales in Europe fell 18% to 90,000 vehicles, while regional operating profit fell 33% to 2.0 billion yen ($17.4 million) from a loss in the last year.

Gupta has confirmed a Japanese media report that Nissan will stop developing new internal combustion engines for Europe from the advent of Euro 7 intake standards as consumers shift to electric vehicles. But Gupta said Nissan will continue to develop combustion power plants for other markets where it makes sense. He pointed to the redesigned Z car and Rogue crossover as the type of gas-powered vehicles still in high demand in some markets.

For the full fiscal year ending March 31, Nissan raised its operating profit forecast to 210.0 billion yen ($1.82 billion), from an earlier outlook of 180.0 billion yen ($1. .56 billion dollars).

Favorable exchange rates contributed to the improved outlook.

Reaching the target would erase an operating loss of 150.7 billion yen ($1.31 billion) from the prior year and generate an operating profit margin of 2.4%.

Despite the improved outlook, Nissan kept its sales target unchanged at 3.8 million vehicles for the current fiscal year. That’s down 6.2% from the 4.05 million vehicles sold the previous year, as Nissan cuts production due to global shortages of semiconductors.

Nissan had originally forecast 4.4 million unit sales for this fiscal year, and Gupta said the microchip bottleneck reduced Nissan’s global volume by about 600,000 vehicles.

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