Nissan Posts a Small Net Loss; Belt-Tightening Continues

(MoneyWatch)  Nissan reported a small net loss of $170 million ?€" small, considering revenue for the quarter ended June 30 fell 35.5 percent versus the year-ago quarter.

Nissan President and CEO Carlos Ghosn said Nissan will stick with a program of belt-tightening. Nissan has reduced inventories of unsold cars and trucks, and cut spending nearly across the board, including a 20?€"percent cut in budgets for marketing and sales; a 75-percent cut in factory overtime; plus a 75-percent cut in travel.

Nissan left unchanged its forecast for a net loss for the full fiscal year ended March 31, 2010. The company expects a net loss of about $1.8 billion for the fiscal year. The quarter just ended was the first quarter of Nissan's 2009 fiscal year.

Separately this week, Japanese rival Honda reported net income of just $79 million for the same quarter, on 30.2 percent lower revenues. In Germany, Mercedes-Benz parent Daimler reported a net loss for the quarter of about $1.5 billion, on 27 percent lower revenue.

In the year-ago quarter, Nissan had net income of $540 million. Like Honda and Toyota, Nissan was hit by a double-whammy of falling sales in the United States and Europe, plus an unfavorable swing in the value of the yen versus the U.S. dollar and the euro, which further eroded profits.

Nissan said that exchange-rate effects contributed 8 percent of its 35.5-percent decline in revenues.

Unit sales for Nissan worldwide were 723,000 for the quarter, down 22.8 percent from the year-ago quarter. U.S. sales were down 31.5 percent; Japan, down 21.6 percent; Europe, down 24.6 percent. China was an exception to the rule, with sales up 9.3 percent, but for China, that's slow growth by recent standards.

"As we announced in May, we expect fiscal year 2009 to be a tough year for our financial performance," said Nissan COO Toshiyuki Shiga, in prepared remarks for a July 29 press conference.

Chart: Nissan