Nissan's First-Quarter Profit Drop Attributed to "Weaker Product Mix"

Nissan stunned analysts and auto industry observers on Tuesday as it posted a 3.2 percent drop in quarterly operating profit, which it attributed to a number of things, including a "weaker product mix." The rapid consumer shift away from light trucks and SUVs in the U.S. was the main culprit for the dismal report. Nissan's U.S. sales of light trucks such as the Titan were down 12 percent in the first half of 2007. Nissan said its consolidated net income after tax in the first quarter was down 16.2 percent compared with the same period a year ago.

"Our results for the first quarter were in line with our expectations, considering factors such as weaker product mix, higher raw materials prices and the change in effective tax rate," said Carlos Ghosn, Nissan president and CEO, in a statement. Nissan's results are noteworthy, given the brisk sales of Toyota and Honda. But Nissan said a 5.9 percent increase in global vehicle sales in the first quarter still keeps it on track to meet its forecast of a 3 percent rise in full-year operating profit.

Nissan said it sold 875,000 vehicles in the April-June period globally and said it will launch 11 new products globally in 2007. "We are encouraged by the momentum building globally for our new products such as Qashqai, Altima, Livina and Infiniti G35, and we maintain our forecast for the full fiscal year," Ghosn said.