(Bloomberg) — Nissan Motor Co. first quarter earnings beat estimates as the Japanese automaker dealt with supply chain snarls and surging raw material costs by focusing sales on more profitable models.
Operating profit was 64.9 billion yen ($479 million) in the three months ended June 30, the Yokohama-based company said in a statement Thursday. That topped analyst estimates of 48.9 billion yen, according to data compiled by Bloomberg. Sales rose to 2.14 trillion yen, compared with estimates of 2.02 trillion yen.
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“The business environment remained more challenging than expected,” Chief Executive Officer Makoto Uchida said in the statement. Production was constrained by Shanghai’s Covid lockdown and semiconductor shortages, while soaring materials prices also impacted earnings. However, it increased revenue per unit by focusing on quality of sales.
The maker of Pathfinder SUVs and Altima sedans maintained its forecast for operating profit of 250 billion yen this fiscal year, up slightly from the 247 billion yen operating profit posted in the year ended March 31. Chief Operating Officer Ashwani Gupta said on a call that the company is confident of meeting its targets.
“The guidance appears to conservatively reflect higher material prices and logistics costs, slow global retail unit sales growth, as well as an increase in R&D,” Bloomberg Intelligence analyst Tatsuo Yoshida said in a note before the earnings. “This leaves room for an eventual upgrade as vehicle production normalizes.”
Nissan said it has received 23,000 orders for the Sakura, a mini electric vehicle that is only available in Japan. More than half the buyers are new customers, the automaker said.
Nissan shares rose 3.7% in Tokyo trading Thursday before the results were released, paring this year’s decline to 5%.
(Adds COO comment in fourth paragraph, orders for Sakura EV in seventh.)
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