On the Dash:
- Nissan reports Q2 operating income of ¥52 billion ($338 million) but maintains a cautious full-year outlook amid ongoing losses.
- Retail sales fell sharply in China and Japan, while global production and workforce reductions aim to restore profitability.
- Tariffs, supply-chain risks, and chip shortages pose ongoing challenges despite management’s confidence in a second-half recovery.
On Thursday, Nissan reported operating income of 52 billion yen ($338 million) for the quarter that ended September 30, signaling a modest recovery amid its ongoing financial turnaround. Despite the gain, the Japanese automaker withheld a full-year net income forecast and will forgo an interim dividend for fiscal year 2026. The company continues to navigate U.S. tariffs, supply-chain disruptions, and declining sales in key markets such as China and Japan.
The automaker’s first-half operating losses widened to 177 billion yen, while Q2 net losses reached 106.2 billion yen ($689.1 million), its fifth consecutive quarterly net loss. Revenue also fell 3.8% to 2.872 trillion yen, with declines in all major regions except North America. Additionally, retail sales dropped 18% in China and 17% in Japan, offset by a 2% increase in the U.S., while full-year global sales are projected at 3.25 million units.
To address its financial challenges, Nissan is executing an extensive restructuring plan. The company will cut 20,000 jobs through March 2028, reduce global production capacity from 3.5 million to 2.5 million vehicles, and consolidate manufacturing sites from 17 to 10, excluding China. The automaker also sold its Yokohama headquarters for 97 billion yen, booking 73.9 billion yen in special gains to fund restructuring and growth initiatives.
CEO Ivan Espinosa emphasized that the company remains on track to achieve positive operating profit and free cash flow by fiscal 2027. CFO Jeremie Papin expressed confidence in second-half sales growth, supported by new model introductions, while analysts caution that limited room for gains in volume, product mix, or cost control could make achieving full-year targets ambitious.
However, Nissan’s outlook continues to face external pressures, including U.S. tariffs, foreign-exchange volatility, and potential chip shortages from Nexperia amid ongoing geopolitical disputes. Investor sentiment has been cautious, with shares down approximately 30% year-to-date. The company plans to unveil nine new models through fiscal 2028 to drive recovery and strengthen its competitive position.
