Nissan shares surge as automaker projects ¥50 billion operating profit, reversing loss forecast

Nissan Motor Co. shares surged the most in more than two months after the Japanese carmaker dramatically revised its full-year earnings outlook, now projecting an operating profit of ¥50 billion instead of the previously anticipated loss of ¥60 billion. The reversal marks a critical turnaround for the automaker, which was facing what would have been its first annual operating loss in five years.

The improved forecast reflects early signs of operational recovery at the struggling carmaker. Nissan's automotive gross profit margin has shown meaningful improvement, climbing to 12.5% in the second quarter of fiscal year 2026 and 10.5% in the third quarter, compared to just 5.4% in the first quarter. This margin recovery suggests the company's cost-cutting and operational restructuring efforts are beginning to gain traction.

However, the broader picture remains challenging for Nissan. Full-year revenues are expected to decline 4.6% year-on-year to approximately ¥12 trillion, reflecting a global slowdown in vehicle sales. The third quarter saw revenues fall 5.1% year-on-year to ¥3 trillion, with operating income plummeting 43.6% to ¥17.5 billion. The company faces particular headwinds in Asia and Europe, where Chinese competitors have steadily eroded Nissan's market share. Despite the recent profit forecast revision, credit rating agency Fitch Affirms Nissan at 'BB' with a negative outlook, indicating ongoing concerns about the company's financial stability.

The profit forecast revision, announced Monday, provides some relief for investors and stakeholders amid months of disappointing performance. Yet the path forward remains uncertain, with the company still grappling with structural challenges in key markets and intensifying competition from Chinese automakers gaining ground globally.