Nissan says it expects 6th loss in last seven years Sales slump, stock losses blamed for 1st-half decline

Automobiles

November 11, 1998|By BLOOMBERG NEWS

TOKYO -- Nissan Motor Co. said yesterday that it lost 32.55 billion yen ($266 million) in the first half because of slumping sales and extensive stock losses, forcing Japan's second-largest automaker to predict its sixth full-year loss in seven years.

The maker of midsized sedans and pickup trucks projected that the company and its subsidiaries will lose 30 billion yen for the fiscal year that ended March 31, jettisoning an earlier forecast of breaking even.

Without the stock loss, a 76 billion-yen charge on its plunging investments in banks and other securities, Nissan would have remained in the black, analysts said. The loss also masks recent benefits from an end to costly customer incentives that dogged its U.S. business last year.

"They're improving because they're no longer faced with problems of leased vehicles in the U.S.," said Steve Usher, an auto analyst at Jardine Fleming Securities (Asia) Ltd., who expects Nissan's operating profit to rise 83 percent for the fiscal year to 154 billion yen ($1.27 billion).

The six-month loss, a figure for the parent company that reflects only operations in Japan and exports, followed a profit of 38.50 billion yen a year earlier. Nissan reports consolidated earnings only at the end of each fiscal year.

First-half sales fell 8 percent to 1.64 trillion yen ($13.5 billion) from 1.78 trillion yen. The company expects consolidated sales for the full year to fall 1.5 percent short of its forecast of 6.4 trillion yen.

North America and Asia, where a prolonged economic slump sapped sales, together account for about 80 percent of Nissan's revenue.

Pub Date: 11/11/98

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