PARIS -- Renault lowered its outlook for full-year revenue after first-half profit was hit by weakening vehicle demand in Europe and an earnings collapse at alliance partner Nissan.
Net income slumped by more than half to 970 million euros ($1.1 billion) in January-June as revenue fell 6.4 percent to 28.05 billion ($31.3 billion), Renault said in a statement on Friday.
Operating profit dropped 14 percent to 1.65 billion euros ($1.8 billion).
"Given the degradation in demand, the group now expects 2019 revenues to be close to last year's," Renault said, abandoning an earlier pledge to increase revenue before currency effects.
Operating margin declined to 5.9 percent from 6.4 percent. Renault kept its forecast for a full-year operating margin of 6 percent.
Nissan’s performance cut Renault’s profit by 21 million euros ($23 million) in the first half, after contributing 805 million euros ($896 million) a year before. Renault holds a 43 percent stake in the Japanese automaker.
Nissan on Thursday doubled the number of jobs it plans to eliminate to 12,500 and unveiled new production cuts. It reported a 99 percent drop in first-quarter profit and an operating margin of 0.1 percent, blaming sales incentives and over-expansion under former Chairman Carlos Ghosn.
Citi analyst Raghav Gupta-Chaudhary flagged a lower-than-usual 258 million euros ($287 million) in joint purchasing savings for Renault. "We thought this would be weak in light of the well-documented difficulties with the alliance," he said.