Nissan Keeps FY2027 Outlook After Stronger-Than-Expected Quarter

Nissan exceeded analyst expectations in the first quarter of its fiscal year, reporting an operating profit of ¥78 billion (US$497 million) for the three months ended June 30 and maintaining its earnings outlook for the fiscal year ending March 2027. The results mark an improvement from the ¥79 billion (US$503 million) operating loss recorded in the same period a year earlier and provide an early indication of progress under the restructuring plan led by CEO Iván Espinosa.

The Japanese automaker reported quarterly net sales of ¥3 trillion (US$19.1 billion), in line with market expectations. Operating profit significantly surpassed analyst estimates, which had projected approximately ¥6 billion (US$38.2 million). Nissan maintained its full-year forecast of ¥200 billion (US$1.2 billion) in operating profit and ¥13 trillion (US$82.8 billion) in revenue but lowered its global sales volume target to 3.15 million vehicles from 3.3 million, citing a more challenging business environment, particularly in China.

The quarterly performance reflects the initial impact of Espinosa's turnaround strategy, which focuses on cost reductions, shorter vehicle development cycles and improving the company's position in key markets, including the United States and China. The company continues to manage higher input costs, exchange rate fluctuations and increasing competition from Chinese automakers.

"We have made considerable progress in our efforts to reduce costs," Espinosa said during a press conference. "However, challenges across the global industry, particularly in China and the Middle East, have affected some areas of our business."

Espinosa said China's total automotive industry sales volume declined 22% between January and June, while Nissan's sales in the country fell 15% during the same period. Although the company reduced its sales outlook because of weaker market conditions, Nissan's decline remained below the industry's overall contraction, according to management.

The company also identified geopolitical risks as a factor affecting its operations. Espinosa said the conflict involving the United States and Iran has disrupted business conditions in the Middle East. Nissan has established alternative supply routes to mitigate the impact, but he said uncertainty is expected to continue affecting profitability until supply chains stabilize.

Nissan's results come after the automaker implemented measures to improve efficiency following several years of declining sales and management changes. The company has also sought to strengthen its competitiveness as the global automotive industry accelerates the transition toward electric vehicles and software-defined vehicles.

The automaker continues to face financial challenges despite the quarterly improvement. Nissan has reported losses during the previous two fiscal years and carries debt of approximately ¥4.4 trillion (US$28 billion). Credit rating agencies have downgraded its debt to non-investment-grade status, increasing pressure on management to restore profitability and strengthen its balance sheet.

Even as it works to recover, Nissan is seeking to rebuild its position in markets where it was once an early leader in electrification. Despite introducing some of the industry's first mass-market hybrid and battery electric vehicles, the company lost market share in both the United States and China as competitors expanded their product portfolios.

China remains central to Nissan's long-term strategy. The automaker has outlined plans to reach annual sales of 1 million vehicles in the country by the end of the decade while also expanding exports from its Chinese operations to other international markets. Management expects those initiatives, together with continued cost reductions and operational restructuring, to support the company's recovery while maintaining its financial targets for fiscal 2027.