Nissan Motor Co. posted a 13% decrease of its operating profit in the January-March fiscal fourth quarter as favorable exchange rate and strong sales in North America were unable to offset the declining sales in major markets like Japan and China. In the latest quarter, Nissan’s operating profit fell to 171.6 billion yen ($1.43 billion) from the previous year’s 197.7 billion yen ($1.65 billion).
The automaker also said that its net income went up by 3.3% to 118.8 billion yen ($993.1 million). Its global revenue climbed 2.6% to 3.29 trillion yen ($27.50 billion) even as global sales fell by 2.1% to 1.48 million vehicles in the quarter. Quarterly profits took a dive as sales in key markets fell and as the automaker incurred high costs to launch a new product in North America.
The automaker’s operating profit in North America dropped by 23% to 79.9 billion yen ($166.3 million) during this period, as Nissan increased its production of the Murano crossover and as it made preparations for the Maxima sedan. Meanwhile, its regional sales increased to 1.65 million units – a 12% jump. In Japan, its quarterly sales decreased by 19%.
In China, it had a 10% drop. However, Nissan was still able to rack up improvements in earnings across the board for the full year. Japanese automakers benefited from the rising demand in North America and the depreciating yen, which is good for exports and increases the yen-denominated value of overseas earnings.
According to Nissan CEO Carlos Ghosn, the restraint with the incentives in the U.S. and the strong sales of models like the Rogue crossover contributed to the 54% annual increase in the operating profit in North America. It also boosted sales in this market by 12% to 1.65 million units.
At Nissan’s earnings announcement, Ghosn declared that it had record sales in North America and that its strong performance was mainly influenced by its core models; namely: the Altima, Rogue and Sentra.
He also said that results for the full year received an additional boost from the foreign exchange rate windfalls that added 68.6 billion yen ($573.4 million) for the entire fiscal year that ends March 31, 2015.
Nissan posted an 18% increase of its twelve-month operating profit to 589.6 billion yen ($4.93 billion). Meanwhile, its global net income rose 18% to 457.6 billion yen ($3.83 billion). Global revenue climbed 8.5% to 11.38 trillion yen ($95.13 billion).
Global retail sales for the fiscal year went up 2.5% to 5.32 million vehicles. In these twelve months, volume in Europe increased by 12% to 755,000 vehicles. The automaker was able to post a 5.1% sales increase in Russia with 173,000 units sold even as the demand in the car market has fallen.