Nissan's EPS Misses, Sales Grows

Zacks

Nissan Motor Co. (NSANY) reported a 7.7% increase in profits to ¥106.0 billion ($1.35 billion) or ¥25.30 (32 cents) per share in the second quarter of fiscal 2012, ending March 31, 2013 from ¥98.4 billion or ¥23.52 per share in the corresponding quarter last year. However, earning per share missed the Zacks Consensus Estimate of 58 cents per share.

Revenues went up 5.5% to ¥2.41 trillion ($30.67 billion) in the reported quarter, driven by an 8.3% increase in unit sales to 1.27 million vehicles globally. The year-over-year improvement in unit sales was attributable to higher sales volume in Asia and North America, partially offset by lower sales in Japan and Europe.

Revenues from North America and Asia improved 16.1% to ¥938.2 billion ($11.9 billion) and 9.1% to ¥577.0 billion ($7.3 billion), respectively. However, revenues from Europe declined 9% to ¥354.6 billion ($4.5 billion) and Japan decreased 6.9% to ¥1.2 trillion ($14.6 billion) during the quarter.

Operating profit in the quarter rose 4.4% to ¥166.4 billion ($2.12 billion) from ¥159.3 billion in the year-ago quarter. The increase in operating profit was based on a 23.9% increase in operating profit from Japan and 35.9% surge in Europe, partially offset by disappointing results in North American and Asian operations.

Financial

Nissan’s cash on hand and in banks decreased to ¥734.3 billion ($9.3 billion) as of September 30, 2012 from ¥765.4 billion as of March 31, 2011. Total debt went up to ¥3.2 trillion ($40.2 billion) as of September 30, 2011 from $2.9 trillion as of March 31, 2012.

In the first half of fiscal 2012, the company reported cash flow from operating activities of ¥86.4 billion ($1.1 billion) compared with ¥264.6 billion in the year-ago quarter. Capital expenditures amounted to ¥389.8 billion ($4.9 billion) in the period compared with ¥289.0 million in the first half of 2011.

Outlook

Nissan lowered its full-year fiscal 2012 guidance due to the adverse effects of strong yen, disruption in China and weak market conditions in Europe. The company expects total revenue of ¥9.8 trillion ($123.2 billion) for fiscal 2012 with sales volume of 5.08 million units. Operating income is projected to be ¥575.0 billion ($7.21 billion) while net income is expected to be ¥320.0 billion ($4.02 billion) for the year. This compared with the prior projections of revenues of ¥10.3 trillion with sales volume of 5.35 million units, operating profit of ¥700 billion and net income of ¥400 billion.

Capital expenditure is expected to be ¥520.0 billion ($6.52 billion) with research and development cost of ¥567.0 billion ($5.86 billion).

Our Take

Nissan Motor is the sixth largest automaker in the world. The company, along with its subsidiaries, engages in the production and sale of automotive products, industrial machinery and marine equipment, primarily in Japan, North America, and Europe. It offers passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts, as well as sales financing activities.

The automaker competes with Honda Motor Co. (HMC) and Toyota Motor Corporation (TM). Currently, its shares retain a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.

 

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