Nissan has reported a set of Q2 results that show net income down on higher taxes but operating profit up. The operating profit gain has taken analysts by surprise.

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Nissan Motor announced that in the six months through September, net income after tax totalled 212.4 billion yen, down 22.5% compared with the same period last year due mainly to a higher effective tax rate and less favorable one-time items compared to the same period in 2006.


However, net revenues amounted to 5.064 trillion yen (US $42.42 billion, euro 31.21 billion) in the April-to-September period, up 11.7% compared with a year ago.


Operating profit totalled 367.1 billion yen (US $3.08 billion, euro 2.26 billion), up 5.3%, while the operating profit margin came to 7.2%. Ordinary profit amounted to 360.3 billion yen (US $3.02 billion, euro 2.22 billion), down 0.2%.


In the first half, Nissan sold 1,816,000 vehicles worldwide, up 6.3% compared with last year on demand for new products.
 
“With many further exciting products to come, Nissan is back on track towards sustainable profitable growth and we maintain our full-year forecast,” said Nissan President and CEO Carlos Ghosn.

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In the first six months of 2007, Nissan launched seven all-new products worldwide: Altima coupe, G37 coupe, Atlas F24, Livina, Aprio, Rogue and X-Trail. During the remainder of 2007, a further four products will be added to the range with the GT-R, Murano, Infiniti EX and Frontier Navara Single Cab pickup. 


In the July-to-September second-quarter, Nissan’s net revenues amounted to 2.618 trillion yen (US $21.93 billion, euro 16.13 billion), up 12.7% compared with a year ago.  Operating profit totalled 218.7 billion yen (US $1.83 billion, euro 1.35 billion), up 12.0%, while the operating profit margin came to 8.4%.


Ordinary profit amounted to 209.0 billion yen (US $1.75 billion, euro 1.29 billion), up 2.4% and net income totaled 120.1 billion yen (US $1.01 billion, euro 0.74 billion), a decrease of 26.8%.
 
The improvement in second quarter operating profit comes from the strong performance of newly-launched products and improved geographical and product mix. Net income is down due to the continued impact of a higher effective tax rate compared to the previous year, Nissan said.


Nissan sold 941,000 vehicles worldwide in the second quarter, up 6.6% compared with the prior year.


Nissan’s forecast remains unchanged for the full fiscal year with operating profit of 800 billion yen (US $6.84 billion, euro 5.41 billion) and net income of 480 billion yen (US $4.10 billion, euro 3.24 billion).


“This is very good — much better than expected,” Koji Endo at Credit Suisse told the FT.


“Provided that the US subprime problem and currency rates aren’t going to be bad, I believe we may be able to add expectations of a revision.”