By Sean McLain
YOKOHAMA, Japan -- Nissan Motor Co. slashed its outlook for the full year after reporting another quarter of declining sales and profit.
The results released Tuesday showed the car maker struggling to overhaul its business, hurt both by a downturn in the global auto industry and turmoil within the company in the year since the arrest of former Chairman Carlos Ghosn.
The company cut its operating profit forecast for the year ending March 2020 by more than a third to Yen150 billion ($1.37 billion), in part because of slower-than-expected sales in the fiscal year so far. The company trimmed its full-year global sales forecast by 300,000 vehicles to 5.24 million, and said it expected global revenue for the year of about $97 billion, down more than $6 billion from the previous forecast.
China has proved especially painful for Nissan. In May, the company said it would increase sales in China to offset declines in the U.S. Now it expects declines in both countries.
While U.S. sales fell in the July-September quarter, the company is seeing the first signs of a turnaround, said Stephen Ma, a Nissan executive tapped to take over as chief financial officer next month. Operating profit in the U.S. was nearly flat, which means Nissan's plan to boost how much it makes from each sale is working, Mr. Ma said.
"It's going in the right direction. With the new Versa and also new Sentra, and new models coming this year, I expect these trends to continue going forward," he said.
However, the U.S. market has continued skewing toward trucks and sport-utility vehicles, making it hard for companies to profit from small cars like the Versa and Sentra.
Even the revised operating-profit forecast looks difficult to reach because Nissan got only about one-fifth of the way there in the first six months of its fiscal year.
Nissan said operating profit fell 70% to $274 million in the July-September quarter from a year earlier. Revenue declined 6.6% to $24 billion for the quarter, as sales declined 7.5% to 1.27 million vehicles.
Nissan in July announced broad production cuts and plans to lay off around 9% of its global staff. Asked whether Nissan needed further cuts, Mr. Ma said the company would take into account its downgraded sales outlook while assessing that issue.
Nissan's dismal results come amid a broader overhaul of its top management. In September, the company's board pushed out former Chief Executive Hiroto Saikawa -- the architect of the current turnaround plan -- in part over Nissan's financial state. A triumvirate of top executives is set to take office Dec. 1.
Nissan said it would hold a shareholder meeting Feb. 18 to add its new executive team to the board. Nissan partner Renault SA also plans to replace one of its representatives on the Nissan board. Thierry Bolloré, who was ousted as Renault CEO last month, will be replaced as a Nissan director by Pierre Fleuriot, a Renault director.
After the arrest of Mr. Ghosn, Mr. Saikawa argued that the company had to undo much of his predecessor's legacy. A push for market share had led to an unhealthy reliance on discounts, particularly in the U.S., and the company's profitability was in danger of taking a hit unless those discounts stopped, Mr. Saikawa said. His plan was to sell fewer cars, but make more money on each.
A year later, Nissan's sales have contracted, but profits have yet to rebound. Mr. Saikawa had said he believed it would take two years to see the results of his turnaround plan.
Write to Sean McLain at firstname.lastname@example.org