TOKYO (Reuters) -Japan’s Nissan (OTC:) Motor slashed its annual outlook after posting a 99% decline in first-quarter operating profit due to weak U.S. sales performance on Thursday, sending its shares sharply lower.
Operating profit for the April-June period totalled 995 million yen ($6.51 million), compared with 128.6 billion yen in the same period a year earlier, far short of the average estimate of 164.4 billion yen in a poll of five analysts by LSEG.
The automaker cut its operating profit forecast for the financial year by 17% to 500 billion yen from 600 billion yen.
The weak result was “mainly due to an increase in selling expense resulting from increased competition,” it said in a filing.
Nissan’s shares were hit hard after the results, at one point falling some 11%. They were down 6.7% in late afternoon trade in Tokyo.
The tribulations in the United States – it said U.S. sales dropped primarily due to an ageing portfolio and a market shift to hybrid vehicles – add to Nissan’s woes in China, where it has been looking to regain ground amid tough competition from local giants.
The Yokohama-based automaker said last month it halted production at one of eight factories it operates through a joint venture with Chinese partner Dongfeng Motor as it seeks to optimise operations.
($1 = 152.8200 yen)