Nissan Motor Co. posted a 11 percent drop in quarterly profit as a stronger yen eroded overseas earnings and domestic sales of minicars supplied by Mitsubishi Motors Corp. slumped after a mileage scandal.
Net income in the quarter through June declined to ¥136.4 billion ($1.3 billion), in line with analysts' estimates, and down from ¥152.8 billion a year earlier, the Yokohama, Japan-based automaker said in a statement Wednesday.
Nissan's deliveries in Japan tumbled more than 20 percent in the quarter as it stopped selling the DayZ models after supplier Mitsubishi Motors said it manipulated fuel-economy data. The rising yen, which has strengthened more than 18 percent against the U.S. dollar in the 12 months through June, is eroding Japanese competitiveness and lowering the value of repatriated earnings.
"A stronger yen is another setback as Nissan generates more than 80 percent of its sales volume overseas," Nikkie Lu, an analyst at Bloomberg Intelligence, said before the earnings announcement. "The loss in Japan has wiped out gains in other markets."
Nissan maintained its full-year forecast for a ¥525 billion profit for the fiscal year ending in March. The company said operating profit increased by 38 percent in the first quarter if the impact of the currency exchange is excluded.
Mitsubishi Motors, in which Nissan plans to acquire a stake for about $2.2 billion, last month forecast its first loss in eight years. The automaker reported a loss of ¥129.7 billion for the quarter ended June, in line with analysts' estimates. It reiterated its forecast given last month for a ¥145 billion deficit for the fiscal year ending in March.