* Q2 op profit 159.3 bln yen, beats consensus 133 bln yen
* Nissan outshines Toyota, Honda with sales gains
* Sees maximum loss of 60,000 cars from floods in Thailand
* Sets optimistic dlr-yen assumption on intervention hopes
* Nissan shares outperform, down 6.7 pct this year
By Chang-Ran Kim
YOKOHAMA, Japan, Nov 2 Nissan Motor Co
posted better-than-expected quarterly profits and lifted its
annual earnings and sales forecasts on Wednesday, shaking off
worries about the Thai floods and the global economy.
The move by Japan's No.2 automaker stands in stark contrast
to the results at rival Honda Motor Co , which withdrew
its earnings guidance this week with no imminent recovery in
sight for its flooded car factory in Thailand.
The country's worst floods in half a century spared Nissan's
factory, but have inundated about 120 of its suppliers, forcing
a suspension for more than two weeks so far.
Nissan said it would try to restart work at least partially
from Nov. 14 by procuring substitute parts through its global
supply network, likely limiting output losses to 40,000 vehicles
in Thailand and any disruption in Japan to 20,000 vehicles.
"The latest results provide some evidence that Nissan is
coming through the Thai flood crisis better than its rivals,"
said Hiroyuki Fukunaga, CEO of Investrust in Tokyo, which does
not own Nissan shares.
Nissan's chief operating officer, Toshiyuki Shiga sounded an
optimistic note, saying the company was poised to continue
outperforming its rivals.
"As we look forward to the second half, we remain confident
in Nissan's ability to deliver improved retail volumes and solid
revenues despite challenging market conditions," he told a news
With a maximum impact of just 60,000 vehicles from the Thai
floods, Nissan raised its global sales forecast for the year to
March 2012 to a record 4.75 million vehicles from 4.60 million.
Nissan said it had plans in place to prevent any impact from
Thailand's floods on production in North America, Europe, and
China, thanks to a more robust supply chain strengthened after
the March 11 earthquake and tsunami in Japan.
The automaker had also hired divers to search its suppliers'
flooded factories to salvage machines and molds that could be
dried and used, Executive Vice President Andy Palmer said.
Nissan, held 43 percent by Renault SA , lifted its
annual operating profit forecast to 510 billion yen ($6.51
billion) from 460 billion yen, bringing it near the consensus
520 billion yen in a survey of 25 analysts by Thomson Reuters
I/B/E/S. It now expects a net profit of 290 billion yen.
"I think the revision is positive, but not necessarily a
surprise," said Tsuyoshi Mochimaru, an auto analyst at
Mitsubishi UFJ Morgan Stanley, adding that the initial forecasts
were excessively conservative. "The strong yen remains a worry
for the second half and the European market is something to
For the July-September second quarter, Nissan said operating
profit fell 4.6 percent to 159.3 billion yen, above an average
estimate of 133 billion yen in a Reuters survey of 13 analysts.
Second-quarter net profit was 98.4 billion yen, down 3.3
percent, while revenue rose 0.7 percent to 2.29 trillion yen as
the maker of the March subcompact boosted its share in most big
FIGHTING YEN STRENGTH
Like other Japanese automakers, Nissan is grappling with a
dollar that has weakened to record lows recently and remains
below 80 yen, even after Japan's yen-selling intervention.
Shiga said Nissan was assuming a dollar rate of 80 yen for
the second half, versus around 78 yen on Wednesday,
partly in the hope that the Bank of Japan's intervention would
have a lasting impact.
Earlier, Mazda Motor Corp slashed its operating
profit forecast to break-even from 20 billion, yen citing
prolonged yen strength. It now expects a net loss of 19 billion
yen instead of a 1 billion yen profit forecast earlier.
Shiga said Nissan was taking aggressive steps to offset the
yen's damage, such as by using its global parts network to buy
more parts from China and elsewhere to lower the cost of
building cars in Japan.
Nissan is also pushing rapidly into emerging markets,
including through a partnership with Ashok Leyland Ltd ASOK.NS>
in India and a recently announced factory in Brazil, he said.
In a bid also to take its premium Infiniti line global,
Nissan said on Wednesday it would locate the brand's global
headquarters in Hong Kong, targeting wealthy consumers in China
and elsewhere. CEO Carlos Ghosn has said Nissan would likely
build Infiniti cars in China eventually because much of the
growth in demand would be in that market.
RUSSIA COVERS EUROPE DEBT WOES
So far this year, Nissan's sales are up by double-digit
percentages in every major region except Japan.
With Honda unable to meet demand, Nissan outsold its rival
in the profitable U.S. market during the quarter, although it
fell below Honda in October.
Demand in debt-burdened European countries such as Spain and
Italy had weakened, but Palmer said surging sales in Russia was
plugging that hole.
"The only problem we have today, frankly speaking, is we
can't make enough Qashqais and Jukes, that's it," he said,
referring to the popular compact SUVs produced in Britain.
Nissan's shares have fared much better than its rivals so
far this year, falling 6.7 percent against losses of 19 percent
and 25 percent for Toyota Motor Corp and Honda,
Before the results were announced on Wednesday, Nissan
shares ended down 2.8 percent. Mazda lost 5.4 percent.
Toyota will report financial results on Nov. 8.