YOKOHAMA, Japan -- Nissan, the Japanese automaker that faces slowing growth abroad and management scandals at home, reported Tuesday that its profit has continued tumbling and that the situation is expected to get worse.
The automaker said its net income in the most recent quarter fell 54.8%, to about $540 million, from the same period last year. Its revenue fell by 6.6%.
Nissan also reduced its profit forecast for the fiscal year that will end in March by 35%, to $1 billion. Vehicle sales, too, are expected to trail previous expectations by more than 5%, the company said. The full-year dividend, which had been projected at 35 cents per share, could be revised, Nissan said, "following internal discussion."
The results show the long path ahead for Nissan as it tries to simultaneously navigate an industrywide slump in global auto sales and emerge from a damaging series of events that began a year ago with the detention of its leader at the time, Carlos Ghosn, on suspicion of financial wrongdoing.
Tokyo prosecutors have indicted Ghosn on four charges. Hiroto Saikawa, who replaced Ghosn as the company's chief executive, has resigned over his own pay scandal. Sales have plunged, top talent has fled, and the company has begun eliminating 12,500 jobs globally.
Ghosn has denied the charges against him.
The troubles also extend to Nissan's alliance with French automaker Renault. Ghosn's departure exacerbated deep divisions in the partnership, which includes Mitsubishi and is one of the world's largest automotive groups, producing more than 10.7 million vehicles in 2018.
Renault owns more than 43% of Nissan and would suffer financially if the company lowered its dividend.
Nissan's financial results Tuesday were worse than expected but didn't come as a complete surprise. In May, the company warned investors that its performance would continue to worsen during the coming year, with net profit expected to hit "rock bottom" by March.
In part, the company has fallen victim to slackening global demand for automobiles, particularly in the United States, Nissan's largest market, and in Europe. Overall sales declined 6.6% in the second quarter from a year earlier, the company said, with a drop of more than 5% in North America.
The worsening economic conditions have also hit Nissan's alliance partners. Renault's revenue dropped 6.4% in the first half of 2019 from a year earlier, and operating profit fell 11.8%. At Mitsubishi, profit plummeted 95% during the first half of its fiscal year.
But some of Nissan's problems are self-inflicted. Under Ghosn, the company focused on expanding its share of the U.S. market by aggressively discounting its vehicles and increasing fleet sales -- a strategy that rankled dealers and, Nissan now says, undermined its brand.
Nissan has also failed to develop vehicles that appeal to the changing tastes of American consumers, who are more interested in trucks and SUVs than Nissan's sedans.
"The most important thing for us right now is business fundamentals in the U.S.," said Chief Financial Officer Stephen Ma, adding that he expected the company to see improvements in the market in the coming months.
Business on 11/13/2019