YOKOHAMA, Japan - Nissan Motor Co, Japan's third-largest automaker, returned to quarterly profit on Tuesday and lifted its outlook for the second time, as brisk global sales signal the worst may be over for the auto industry.
Nissan joins Toyota Motor Corp and Honda Motor Co in raising annual forecasts, underscoring the impact of government stimulus and the improvement in the global economy following the worst downturn in decades.
Nissan initially projected a second straight year of losses, but changed its outlook in November as Chinese government incentives helped sales in that fast-growing market.
Continued success in China, the world's third-largest economy, is vital for the company, some industry analysts say.
For Nissan, I am placing my hope on China, whose contribution has become clear to the automaker's recovery, said Takeshi Osawa, a senior fund manager at Norinchukin Zenkyoren Asset Management.
Nissan's positive results come as Toyota struggles with the worst recall in its history, involving more than 8 million vehicles and tarnishing its reputation for industry-leading quality.
Nissan acknowledged the problems at its bigger rival, with Chief Operating Officer Toshiyuki Shiga telling a news conference that Nissan would focus more on winning customer trust.
Shiga declined to say how much business, if any, Nissan expected to win from the Toyota recall.
Nissan, which is 44 percent owned by France's Renault SA, expects an operating profit of 290 billion yen for the year that ends in March, up from its previous estimate of 120 billion yen.
That compares with a 210 billion yen average estimate in a poll of 19 analysts by Thomson Reuters I/B/E/S.
Carlos Ghosn, the head of both Nissan and Renault, said in November that global car sales had bottomed out, saying that he did not expect the global economy to slip back into recession.
Nissan reported an operating profit of 134.07 billion yen ($1.5 billion) for the October-December quarter, swinging from a loss of 99.19 billion yen a year earlier.
The result beat the average estimate of 80 billion yen from three analysts.
It also posted a net profit of 44.97 billion yen, against a loss of 83.16 billion yen a year earlier.
Shares of Nissan have risen 8.7 percent in the last three months, outperforming the Nikkei stock average's 1.7 percent gain.
Nissan shares closed up 2.4 percent at 731 yen before the results announcement, against a 0.2 percent fall in the Nikkei.
(Additional reporting by Taiga Uranaka; Editing by Chris Gallagher and David Dolan)