TOKYO (Reuters) - Japan's Nissan Motor Co (7201.T) reported a 16 percent rise in quarterly profit, helped by popular vehicles such as the Rogue and Qashqai SUVs, but warned a weak dollar and U.S. economic woes meant a rougher road lay ahead.
Excluding an accounting change, third-quarter operating profit fell 7.2 percent but Japan's No.3 automaker -- 44 percent owned by Renault SA (RENA.PA) -- stuck to its forecast for annual operating profit to rise 3 percent.
"We're taking a cautious stance for the fourth quarter and beyond," Corporate Vice President Joji Tagawa told a news conference, citing turmoil in the U.S. market due to the subprime crisis and high commodity and energy prices.
As well, a stronger yen against the dollar will cut profits when they are brought home to Japan.
"But unlike the situation a year ago this is due to tough external conditions and not Nissan-specific challenges," Tagawa added.
Nissan is enjoying powerful growth in emerging markets such as China, Russia and the Middle East, as well as a recovery in the United States.
Global vehicle sales climbed 13 percent in the quarter, with all regions posting a rise except Japan, where the car industry faces a contracting market as the population ages.
However, rising sales overseas have helped Nissan make more use of its domestic car factories, improving profits at home.
October-December operating profit came to 211.9 billion yen ($2 billion), up from 183.1 billion yen a year ago despite a negative impact of almost 20 billion yen from currency swings. That was in line with an average estimate of 213.5 billion yen in a survey of seven brokerages by Reuters Estimates.
Net profit grew 27 percent to 132.2 billion yen while revenue rose 18 percent to 2.77 trillion yen.
"It is positive that the firm posted a growth in the U.S. market," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
Carlos Ghosn, chief executive of both Nissan and Renault, has been downbeat on the outlook for the key U.S. market but Nissan sales rose 3.7 percent there, versus a 2.5 percent fall in the total market, thanks to successful launches for the Rogue crossover and the introduction of the Murano SUV and Infiniti EX.
NATURAL HEDGE
Domestic rivals Honda Motor Co (7267.T) and Suzuki Motor Corp (7269.T) this week also reported double-digit rises in quarterly profit thanks to stronger car sales and windfalls from the yen's fall against currencies other than the U.S. dollar.
For Nissan, the euro's appreciation against the yen did not have a big favorable impact, Tagawa said, because its move against other currencies such as the rouble and pound were not so favorable.
He said Nissan was relatively well-protected against the dollar's weakness due to the high rate of local production in the United States, at 80 percent.
"Our localization rate is high compared with our rivals, and we're benefiting from this natural hedge," he said.
The dollar averaged 113.3 yen in the third quarter versus 117.8 yen the previous year while the euro rose to 163.9 yen from 148.3 yen.
For the full year ending on March 31, Nissan kept its forecasts unchanged for an operating profit of 800 billion yen and net profit of 480 billion yen, roughly in line with consensus forecasts from 20 brokerages.
Investors will eye a new business plan to be unveiled in April for the three years to March 2011. Ghosn has signaled accelerated growth, with more than 33 new models compared with 28 during the past three years.
NEW MODELS POWER SALES
The profitability decline in the latest quarter, excluding the accounting change, was also due to higher commodity prices.
European sales rose 12.5 percent, largely fuelled by runaway demand for the Qashqai SUV. Nissan said on Thursday it would add 800 staff and begin a third production shift at its plant in northeast England in response to demand for the model.
Sales in markets outside Japan, Europe and North America grew 28 percent, with big gains in China and the Middle East.
Sales in Japan fell 0.9 percent, but that was better than a 3.7 percent fall in overall demand as Nissan outperformed rivals.
Shares of Nissan lost 33 percent in the year to Thursday, underperforming Tokyo's transport sub-index (.ITEQP.T), which has fallen 26 percent.
Prior to the earnings announcement, the stock ended down 0.7 percent on Friday, against a 0.1 percent rise in the subindex.
($1=106.36 Yen)
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