Key Takeaways:
Nissan Motor returned to profit in the first quarter, posting operating income of ¥77.9 billion that beat the ¥6.01 billion consensus.
"The environment remains challenging, particularly in China and the Middle East, but our direction is clear," Chief Executive Officer Ivan Espinosa said in a statement. "We are executing Re:Nissan with discipline and urgency."
Net sales rose 9.5 percent to ¥2.964 trillion in the April-June quarter, below the ¥3.05 trillion market estimate. Net income of ¥3.8 billion reversed a ¥115.8 billion loss a year earlier, marking the automaker's first quarterly profit in two years after combined net losses of more than ¥1.2 trillion across fiscal 2024 and 2025.
The turnaround was driven by the Re:Nissan restructuring plan launched in May 2025, which targets 20,000 job cuts, a reduction of assembly plants from 17 to 10, and roughly ¥500 billion in cost savings by fiscal 2027. The plan delivered ¥60 billion in first-quarter savings, bringing cumulative reductions to ¥315 billion. A weak yen added about ¥35 billion to operating profit, while one-time gains tied to US tariffs provided further support. Raw material inflation trimmed ¥23.5 billion.
Despite the profit, Nissan cut its fiscal 2026 global sales outlook to 3.15 million units from 3.3 million, citing a faster-than-expected market deterioration in China, where April sales fell 30.7 percent year over year. Europe declined 14.6 percent in the quarter on competition from Chinese automakers, while Middle East supply chains were constrained by geopolitical conflict. The company maintained its full-year targets of ¥200 billion operating profit and ¥20 billion net income, both above market expectations.
Nissan shares fell 3.33 percent in Tokyo after the results, with investors focused on the lowered volume guidance. A 7.1-magnitude earthquake in Kumamoto halted some production lines at its Kyushu plant, affecting about 5,000 vehicles. US tariffs, now at 15 percent after falling from 27.5 percent, remain above the prior 2.5 percent level.
The profit recovery rests on cost cuts and currency rather than volume growth, leaving Nissan's ability to sustain profitability tied to stabilizing China and launching new models such as the Rogue e-POWER in the US and the NX8 in China. Investors will watch the second-quarter results for signs that the ¥200 billion operating profit target remains achievable.
This article is for informational purposes only and does not constitute investment advice.
