(Bloomberg) — Nissan Motor Co. forecast a return to profitability this fiscal year, reflecting the Japanese automaker’s confidence that it can recover from the chip shortage-related production cuts.
Operating profit will now be 150 billion yen ($1.4 billion) for the year ending March, up from its previous forecast to break even. On average, analysts had predicted the Yokohama-based company to turn out a slim profit of 94 billion yen for the year. For the recently ended April-June quarter, Nissan reported a 76 billion yen operating profit, instead of a loss predicted by analysts.
Nissan’s global sales have been boosted by recovering demand for cars in recent months and its newly released models are tracking well. But the company’s ability to flip into the black this year will largely hinge on its ability to recover lost output in the second half.
Earlier this year, Nissan warned that is expecting to lose about 500,000 units of production this fiscal year due to the semiconductor shortage, largely in the first half. Chief Executive Officer Makoto Uchida said in a recent interview with Bloomberg Television that the automaker is seeking to recover “half and more” of that lost production by working on inventory levels and production schedules.
With regard to semiconductor procurement, many automakers are doing better than they were a few months ago, according to Bloomberg Intelligence analyst Tatsuo Yoshida. Plans Nissan made earlier this year incorporated considerable risk factors, Yoshida said, and after this quarter, profit conditions “should shift in a slightly more positive direction.”
Nissan shares are up 6% this year after climbing ahead of results Wednesday. The stock fell 12% in 2020.
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