(Bloomberg) -- Nissan Motor Co. raised its profit forecast as the weaker yen and growth in U.S. deliveries boosted export earnings, countering a slowdown in Japan.
Net income will be 420 billion yen ($3.5 billion) in the year ending March, compared with its previous projection for 405 billion yen, the Yokohama, Japan-based company said in a statement today. Nissan also raised its projections for full-year operating profit and net revenue, though it cut the global delivery target by 150,000 vehicles to 5.3 million units.
Chief Executive Officer Carlos Ghosn is counting on the U.S. to buffer the effect of a recession in Russia and slowing growth in Japan and China. Major automakers including Nissan all reported their best January U.S. vehicle sales in at least seven years, buoyed by cheap gasoline and falling unemployment.
“The U.S. is their biggest cash cow,” said Koji Endo, an auto
analyst at Advanced Research Japan. “The strong trend will continue for a while and they will keep enjoying the ride in that market.”
Operating profit in the third quarter rose 98 percent to 156 billion yen, beating the 119.6 billion yen average of analysts’ estimates. Sales rose 17 percent to 2.94 trillion yen, compared with the 2.71 trillion yen analysts’ average.

Share Performance

Nissan rose 1.4 percent to 1,064 yen in Tokyo trading today, before it announced earnings. The stock has gained 20 percent in the past 12 months, compared with the 18 percent gain for the benchmark Topix index.
In North America, Nissan reaped 81.6 billion yen in operating profit last quarter, increasing from 3.4 billion yen a year earlier.
Nissan boosted sales in the U.S. by 11 percent to a record last year, compared with the 6.2 percent growth at Toyota and 1 percent rise at Honda, according to Autodata Corp. It outsold Honda last month for the first time since March 2014, helped by rising incentives, according to Autodata.
There are “high expectations” for Nissan’s new Titan pickup truck as it is aimed at the niche between heavy-duty and light-duty trucks, Takaki Nakanishi, an auto analyst at Jefferies Group LLC, wrote in a report last month.

Russian Slump

Nissan posted an operating loss of 10.3 billion yen in Europe, compared with an operating loss of 7.3 billion a year earlier, dragged down by the Russian market.
While the no-frills Datsun models boosted Nissan’s unit sales in Russia, the ruble’s almost 50 percent plunge in 2014 has forced Nissan to halt taking orders of some vehicles at the end of last year to safeguard profitability.
Industrywide deliveries of new passenger cars and light commercial vehicles fell 10 percent in 2014 in Russia to about 2.5 million units, according to the Moscow-based Association of European Businesses, or AEB. Russia’s car market will probably fall by another 20 percent in 2015, Nissan Chief Executive Officer Carlos Ghosn said in a Bloomberg Television interview on Feb. 3.
Nissan and partner Renault SA indirectly own 50.01 percent of Lada-maker OAO AvtoVAZ, and has plans to gain at least 40 percent of the Russian car market by 2016. Their combined market share widened to 30.7 percent last year from 29.6 percent in 2013.

China Competition

In China, where Nissan is the biggest Japanese automaker, sales rose 0.5 percent last year to 1.22 million units, trailing its own reduced target and the industry last year. The automaker said rising competition in the compact car segment and commercial vehicles contributed to the underperformance.
In Japan, operating profit fell to 70.1 billion yen in the third quarter from 87 billion yen last year.
Nissan deliveries fell 1.3 percent last year in Japan, amid intensifying competition in mini-cars and slump in demand following the rise in consumption tax in April.
Nissan based full-year forecast on 108.8 yen against the dollar and 138.9 yen versus the euro. Operating income gets a 12 billion yen boost with every yen’s drop against the dollar, the carmaker has said.