Nissan Shares Plunge Over 10% Following Disappointing Results and Production Cuts

Shares of Nissan Motors dropped as much as 10.12% on Friday, hitting a four-year low, after the company posted disappointing quarterly results and announced plans to cut global production capacity by 20%.

In its second-quarter results for the period ending in September, Nissan reported a net loss of ¥9.3 billion (approximately $62 million), a stark contrast to the ¥190.7 billion profit recorded in the same quarter last year. Operating profit fell nearly 85%, plunging to ¥31.9 billion, while revenue dropped by 5% to ¥2.99 trillion.

The company also revised its full-year financial outlook downward, lowering its revenue forecast to ¥12.7 trillion from ¥14 trillion and slashing its operating profit projection to ¥150 billion, down from ¥500 billion.

In response to the challenging situation, Nissan announced plans to reduce its workforce by 9,000 employees and implement cost-cutting measures. These efforts include rationalizing its asset portfolio and focusing on capital expenditure and research and development. The company is targeting a reduction of ¥300 billion in fixed costs and ¥100 billion in variable costs for the 2024 fiscal year.

Additionally, Nissan’s board decided not to issue an interim dividend and scrapped the year-end dividend forecast. CEO Makoto Uchida will voluntarily forfeit 50% of his monthly compensation from November, with other executives also opting for pay cuts.

Nissan’s sales volume for the first half of its fiscal year declined by 1.6%, with 1.6 million units sold. The company aims to return to profitability and positive cash flow by fiscal year 2026, even with annual sales of 3.5 million units.