Nissan Cuts Earnings Forecast 20%

Nissan Motor Co. has lowered its outlook for net income in the fiscal year ending March 31 to 320 billion yen ($4 billion) from its earlier prediction of 400 billion yen ($5 billion).

The company cites plummeting sales in China where it derives one-quarter of its profit the strong yen and weak demand in Europe. Last year Nissan netted 341 billion yen ($4.2 billion) after its production was devastated by natural disasters in Asia.

The company cut its outlook for this year's operating earnings by 125 billion yen to 575 billion yen ($7.1 billion) with half the decline related to China.

Nissan also trimmed its full-year revenue forecast 5% to 9.8 trillion yen ($122 billion). The company pared the projection for its global sales 5% to 5.08 million vehicles, including forecast reductions of 13% in China, 6% in Europe, 2% in the U.S. and 1% in Japan.

Nissan's Chinese sales, which dropped 35% year over year to 76,100 vehicles in September, plunged 41% to 64,300 units last month. Chinese consumers began shunning Japanese vehicles in late August as a territorial dispute heightened tensions between the two countries.

In the fiscal second quarter ended Sept. 30, the Nissan's net and operating profit climbed 8% year over year to 106 billion yen ($1.3 billion) and 4% to 166 billion yen ($2.1 billion), respectively. Revenue rose 5% to 2.4 trillion yen ($30 billion). Sales grew 8% to 1.27 million vehicles.