Nissan's profits plunge 83% and the coronavirus threatens its turnaround plans
Posted February 13, 2020 5:11 a.m. EST
CNN — Nissan's profits are still plummeting, and the company is now bracing for more pain as the novel coronavirus outbreak threatens to wreak havoc on the global auto industry.
The Japanese carmaker reported on Thursday that operating profit fell to 54.3 billion yen ($495 million) for the three months ended in December, plunging 83% compared to the same period a year earlier.
The earnings missed market expectations, and shares in the company fell 1.5% in Tokyo. Analysts polled by Refinitiv estimated Nissan would pull in 56.7 billion yen ($516 million) in operating profit for the quarter.
The report marks four straight quarters of declining profits for Nissan. The troubled carmaker had already been grappling with sluggish sales and the scandal over its ousted chief Carlos Ghosn.
Now, Nissan is warning that the deadly coronavirus will impact business in China and around the world.
"The market remains tough in part because of the novel coronavirus outbreak," Nissan CEO Makoto Uchida said during the earnings presentation Thursday.
The company said last week that supply shortages of parts from China will temporarily impact production at its Kyushu plant in Japan. It is working to restart two of its plants in China from February 17.
The global auto industry is particularly exposed to the outbreak because the virus originated in one of China's "motor cities." Nissan as well as General Motors, Renault, Honda and Peugeot owner PSA Group all have large factories in Wuhan, which has been on lockdown since late January.
China's auto industry association on Thursday said the impact from the coronavirus on the country's auto production and sales will be worse than from the 2003 SARS outbreak.
-- This story is developing.