Nissan, the worldâ€™s fourth largest carmaker, released its first quarter earnings for 2006 on Monday, announcing a slight increase in net profit despite a reduction in operating margin.
The net income for the first quarter of 2006 was 110.2 billion yen ($939 million) up 4.2 percent from the same quarter last year, which recorded 105.7 billion yen ($901 million). Sales rose 3.1 percent to 2.21 trillion yen. Despite these positive figures its operating margin decreased.
The firmâ€™s operating profit went down 25.7 percent to 153.3 billion yen ($1.31 billion) due in part to a one-time expense for a four-cylinder engine warranty provision in North America. The car makerâ€™s operating profit margin came at 6.9 percent. The reduced operating margin could be explained by a fall in the companyâ€™s global production.
In June, the Japanese global production fell 10.5 percent to 1,647,977 units compared with the same period a year ago. The biggest fall was recorded in the domestic market and the U.S. market.
Domestic production dropped 20.9 percent to 631,714 units, falling year-on-year for the first time in five years. In the US, production fell 15.7% compared with the first half of the previous year to 373,637 units, due to lower output of full-size pickup trucks and SUVs.
In the second half of fiscal 2006, Nissan will release eight new models around the world, including the Sentra, Altima and Infiniti G35 sedans for the U.S.
Nissan President and CEO Carlos Ghosn, said despite the numbers, the firm would still maintain its forecast.
â€œWe are maintaining our forecast for the full fiscal year and remain confident that our new product introductions will provide a significant contribution to our business in the second half of this fiscal year, and to the achievement of Nissan Value-Up,â€ Ghosn said in a statement.