Nissan cuts profit forecast after 70% quarterly drop

Nissan Motor reported a 70% fall in quarterly profit on Tuesday and slashed its full-year forecast to an 11-year low, affected by a strong yen and falling sales, and highlighting the turmoil at the Japanese automaker after the ejection of Carlos Ghosn.

The recent weak showing from Nissan, which also cut its interim dividend by 65% after its worst second-quarter performance in 15 years, shows the scale of the work ahead for its new executive team, which is due to take over on December 1.

Following the removal of former chairman Ghosn almost a year ago, Nissan has been battered by declining profit, uncertainty over its future leadership and tensions with leading shareholder Renault SA – whose shares dropped 2% to their lowest since April 2013 following Nissan’s downbeat guidance.

Nissan shares, dropped 19% this year, closed up 1% at 714.5 yen prior to the results announcement.

Operating profit at automaker by sales came in at 30 billion yen ($275 million) in July-September against 101.2 billion yen a year previously.

That compared with a mean forecast of 47.48 billion yen from nine expert estimates compiled by Refinitiv. Nissan declared an interim dividend of 10 yen per share, down from 28.50 yen a year earlier.

The company’s worldwide vehicle sales dropped 7.5% to 1.27 million in the quarter. Sales in China, its biggest market, dropped 2.5%, while those in the United States dropped 4.5%.

“Our sales in China outpaced the market, but sales in other major locations, including the U.S., Europe, and Japan underperformed,” stated Stephen Ma, a corporate vice president who will become chief financial officer next month.

Sluggish demand for cars in the United States and China, the biggest auto markets in the world, has led to cut-throat competition, and Nissan’s downturn in first-half sales has knocked operating profit off course from the company’s full-year target.