(Adds global sales figure other details)
By Chang-Ran Kim
TOKYO, April 23 (Reuters) - Nissan Motor Co , the first major Japanese car maker to report annual results, posted a 51 percent rise in operating profit on Wednesday and forecast further growth powered by product launches in the key U.S. market for minivans and hot-selling sport utility vehicles (SUVs).
Nissan was hauled back from the brink of collapse by France's Renault four years ago to become Japan's most profitable car maker. Its rivals are also expected to report bigger profits, helped by cost cuts and brisk U.S. sales.
"Nissan's revival is a reality," President Carlos Ghosn told a news conference. "Three years ago, our business was in accelerated decline. Today, we're not only back in the global race, we're among the pacesetters."
Japan's third-largest car maker said it expected operating profit to rise to 820 billion yen ($6.8 billion) in 2003/04, up from 737 billion in the year to March 31, as it benefits from the launch of high-margin models such as the Murano SUV, the Quest minivan and Infiniti FX45 luxury crossover in the United States.
But analysts said success hinged on the health of the U.S. economy. If it slowed, it could drag down demand as well as the dollar, creating bigger risks for Nissan because it is expanding its product line-up and output capacity for that critical market.
Worries have already begun to surface, with Nissan's U.S. sales down about six percent so far this calendar year.
Nissan said revenues in the latest year rose 11 percent to 6.85 trillion yen, thanks to strong sales of its new March sub-compact in Japan and its Altima sedans in North America.
That compared with a year-ago profit of 489.22 billion yen.
The results, which are preliminary, were roughly in line with the market's consensus forecast of 744 billion yen and above the company's projection of 720 billion yen.
PROFITABILITY NOT VOLUME GROWTH
Nissan said profits were driven by its launch of 12 all-new models in 2002/03, which led to sales volume growth in every major region excluding Europe.
The company's global vehicle sales rose 6.7 percent to 2.77 million units in 2002/03, but fell slightly short of its estimate made in October due in part to weaker sales in the United States and Europe in the latter half of the year.
In the current business year, Nissan expects global vehicle sales to grow 9.7 percent to 3.04 million units and sees sales in the United States alone growing by 17.3 percent to 852,000 units.
Ghosn was upfront about Nissan falling short of sales targets, including in the United States, but repeated his mantra that profitability was what mattered, not volume growth.
"Our sales were made on the merits of our products themselves. They were not inflated by additional incentives," Ghosn said in a thinly veiled swipe at the U.S. Big Three, which have used heavy discounts to lure buyers.
"2002 was the year of Japan, and it was successful," he said. "2003 will be the year of the United States, and we will give our best to ensure its success as well."
Nissan aims to boost its operating profit margin -- already the highest in the industry -- to 11 percent this business year, from 10.8 percent last year and just 1.4 percent three years ago.
Still, profits could also be vulnerable to a stronger yen, since Nissan is assuming a stable dollar rate of 120 yen for this year. Nissan said foreign exchange fluctuations slashed its operating profit by 35 billion yen in 2002/03.
SHARES OUTPERFORMING
Nissan, owned 44.4 percent by Renault, is due to announce official results on May 21 but little change is expected.
Nissan shares closed at 888 yen on Wednesday, down around 10 percent over the last year.
The shares have outperformed the wider Tokyo market by over 30 percent in the past year as Nissan's performance has rebounded and as pension funds sought safety away from the troubled financial sector.
In what could give the stock an added boost, Nissan said it would buy back up to 0.2 percent of its outstanding shares, worth up to 11 billion yen, in the period between April 24 and June 18.
Nissan said strong profits had allowed it to eliminate net automotive debt by the end of March, a year ahead of schedule.
The company said it now had a positive cash position of 8.0 billion yen, compared with its 270.1 billion yen of debt at the end of September and a whopping 2.1 trillion yen before restructuring began in 1999. ($1=119.88 Yen)