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Nissan (NSANY) Hits 8-year Low as Top Executive Resigns

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Nissan Motor Co.’s (NSANY - Free Report) third-highest ranked executive and vice chief operating officer, Jun Seki, has abruptly resigned from the company just weeks after taking up the job. Resultantly, the company’s shares fell to a eight-year low, declining 3.1% to 633 yen as of Dec 25, 2019, in the Tokyo Stock Exchange.

Notably, Seki plans to become the president and COO of the major electric components maker, Nidec Corp. (NJDCY - Free Report) . He was one of the contenders to take over as the chief executive officer of Nissan in October but lost to Makoto Uchida. Following the surprise resignation of Seki, Nissan has chosen executive vice president Hideyuki Sakamoto as a board candidate.

Seki’s decision to resign is seen as yet another potential blow to Nissan’s turnaround plan. The company is also struggling to recover from the ousting of former chairman Carlos Ghosn, industry downturn, decade-low profits and strained ties with French partner Renault SA (RNLSY - Free Report) .

Notably, earlier this month, the company faced a fine of $22 million for underreporting Ghosn’s compensation.

Shares of Nissan have underperformed the industry it belongs to over the past year. Its shares have declined 26.8% against the industry’s growth of 13%.

 

 

Nissan, in November, in a three-way partnership with Mitsubishi Motors and France's Renault, cut its full-year sales and profit outlook as it struggles with weak demand in Japan, the United States and Europe as well as the aftermath of Ghosn’s arrest.

For 2019, the Zacks Rank # 3 (Hold) company projects consolidated revenues of ¥10.6 billion, suggesting an 8.4% drop from the prior-year figure. Operating income is estimated at ¥150 million, indicating a fall of 52.9% from that reported in 2018. The company projects earnings per share (EPS) of ¥28.11 for 2019.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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