Nissan’s profit forecast drops amid faltering sales

Nissan lowered its profit forecast for the full year Tuesday, partly because of special charges related to allegations of false financial reporting by former Chairman Carlos Ghosn.

Nissan Motor Co. posted a profit of $637 million in the October-december quarter, down from $2.73 billion the previous year. Quarterly sales grew 6 percent to $27.5 billion.

The main factor behind the sharp weakening in profit for the fiscal third quarter was the absence of a lift from U.S. tax reforms that boosted Nissan’s earnings in late 2017.

The maker of the Leaf electric vehicle, X-trail sport utility vehicle and Infiniti luxury models cut its profit forecast for the fiscal year through March to $3.7 billion, down 45 percent on year. The previous projection was for a $4.5 billion profit.

The company said the main reason for the downgrade was faltering sales in China and the U.S.

But it also logged about $83 million in costs related to the allegations of false underreporting of Ghosn’s compensation, according to Nissan.

Ghosn has been detained without bail since Nov. 19.

He has been charged with falsifying financial reports and breach of trust related to his handling of investment losses and payments to a Saudi businessman. Ghosn has said that the payments were for legitimate services and Nissan didn’t suffer losses.