Nissan lowers loss forecast for year on China sales

Tokyo - Nissan Motor Co, Japan's third-largest carmaker, on Wednesday lowered the losses it expected for the current fiscal year as rising sales in China helped offset falling revenues from Europe and the United States. It said it expected to be 40 billion yen (443 million dollars) in the red for the year ending March 31, compared with a previous forecast of a 170-billion-yen loss. Aggressive cost cutting also helped its bottom line, Nissan said, allowing it to reverse its initial projected operating loss of 100 billion yen to an operating profit of 120 billion yen for the year. Last year, it saw an operating loss of 137.9 billion yen. Operating profit measures a company's earnings minus interest payments and taxes. It is seen as a gauge of a firm's earning power from ongoing operations. The Yokohama-based company also raised its annual sales predictions to 7 trillion yen from 6.95 trillion yen. Nissan joined other Japanese carmakers, such as Honda Motor Co and Mazda Motor Corp, in raising its annual earnings projections, thanks to rising demand in developing economies like China as the United States and Europe struggle to emerge from recession. China's economy, however, continued to grow, and car sales there were spurred on by tax cuts. Nissan raised its sales forecast for China 25 per cent to 712,000 cars this year while also giving far more modest boosts to its US and European forecasts. For its second quarter, net income dropped 65 per cent from the same quarter a year earlier to 25.5 billion yen as a stronger yen cut into earnings, said Nissan, which is 44-per-cent owned by Renault SA. Operating profit for the quarter fell 25 per cent to 83.28 billion yen as sales slumped 26 per cent to 1.869 trillion yen. Worldwide industry leader Toyota Motor Corp is to release its earnings figures Thursday. It was also expected to upgrade its forecast while suffering a second-straight annual loss.