Nissan changes loss guidance to profit, China helps

YOKOHAMA, Japan, Nov 4 - Nissan Motor Co, Japan's third-biggest automaker, revised its annual loss forecast to a profit on Wednesday as soaring sales in China helped drive quarterly earnings beyond the market's expectations.

Nissan now expects an operating profit of 120 billion yen ($1.3 billion) in the year to March 31, 2010, instead of the 100 billion yen loss it had forecast previously.

Nissan cranked up its sales target in the fast-growing Chinese market by nearly a fifth in September as demand surged, particularly for its smaller cars that are eligible for the government's tax incentives.

Unlike rivals Toyota Motor Corp and Honda Motor Co, which report under U.S. accounting rules, earnings made in China are counted in Nissan's operating profits.

Nissan's new operating forecast exceeds the average forecast for an operating profit of 60 billion yen in a poll of 20 analysts by Thomson Reuters I/B/E/S.

Nissan, owned 44 percent by Renault SA, also revised its net loss forecast to 40 billion yen from 170 billion yen.

For the July-September quarter, Nissan made an operating profit of 83.28 billion yen ($922 million), down 25.4 percent from a profit of 111.7 billion yen a year earlier and beating an average estimate of 31.8 billion yen from four analysts.

It made a net profit of 25.53 billion yen, against 73.5 billion yen a year earlier.

Shares in Nissan gained 3.6 percent during the second quarter, outperforming Tokyo's transport sector subindex, which was flat.

Nissan ended up 1.7 percent at 661 yen on Wednesday before the results were announced, against the transport sector's 0.9 percent rise.