YOKOHAMA, Japan -- Nissan Motor Co. reported a 24 percent increase in operating profit in the latest quarter on the back of booming North American sales and cost cutting.
Global operating profit rose to 192.56 billion yen ($1.60 billion) in the automaker's fiscal third quarter ended Dec. 31, from 155.97 billion yen ($1.29 billion) a year earlier.
Net income advanced 25 percent to 127.2 billion yen ($1.06 billion) in the three months, Corporate Vice President Joji Tagawa said while announcing financial results today.
Revenue climbed 2.2 percent to 3.01 trillion yen ($24.8 billion), while global retail sales rose 1.7 percent to 1.28 million vehicles.
Nissan's earnings got a big boost from hefty sales increases in North America and Asia. North American sales climbed 12 percent to 485,000 vehicles in the quarter, keeping the region's place as Nissan’s biggest market.
With Americans buying a record number of new vehicles last year, Nissan joined other automakers in riding the wave of low gasoline prices, cheap credit and an improving labor market. The company's sales gain outpaced peers Toyota Motor and Honda Motor for the third-straight year, with Rogue deliveries surging 44 percent, the biggest jump among top models.
"It's very clear the driving force is North America," Seiji Sugiura, an analyst at Tokai Tokyo Research Center, said before Nissan released its results. "Their new cars have contributed to improvement in both profitability and sales."
Sales in Asia rose 5.7 percent to 365,000 vehicles with rising sales in some markets offsetting a 5.7 percent slide in China sales. Nissan booked falling sales in Japan.
While the automaker's vehicle sales were strong in western Europe, Nissan's European region is suffering because of Russia's slump. The weakening ruble and economic uncertainty has undermined demand in Russia, Tagawa said.
Sales in Europe slumped 14 percent to 173,000 vehicles in the quarter, while the region’s operating loss widened to 10.86 billion yen ($90.1 million), from 10.35 billion yen ($85.9 million) in the same period of the previous year.
Globally, Nissan's quarterly profits were boosted by cost reductions, partly due to falling raw material costs, Nissan said. Cost control added 53.7 billion yen ($445.68 million) to operating profit in the quarter.
Foreign exchange rates, which have buoyed Nissan earnings in recent quarters, took a bite out of profits this time.
The dollar-yen rate was a positive but not enough to offset losses from other currencies such as the Mexican peso, Canadian dollar, Australian dollar and Russian ruble.
Looking ahead, Nissan maintained its previous earnings forecast for the current fiscal year ending March 31, 2016.
Nissan expects to sell 5.5 million vehicles worldwide this fiscal year, or 7 percent more than the 5.14 sold the year before. Revenue should expand 7.7 percent to 12.25 trillion yen ($101.67 billion), the company predicted.
Operating profit is seen increasing 24 percent to 730.0 billion yen ($6.06 billion) for the full year.
Net income is expected to grow 17 percent to 535.0 billion yen ($4.44 billion) from the previous year.
Bloomberg contributed to this report