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Strong U.S., European demand boosts Nissan third-quarter operating profit

A man wearing a mask walks under a logo of Nissan Motor Co. outside the company's dealership in Tokyo, Japan, February 10, 2016. REUTERS/Yuya Shino

By Naomi Tajitsu YOKOHAMA, Japan (Reuters) - Nissan Motor <7201.T> posted a forecast-beating 24 percent jump in third-quarter operating profit and kept its guidance for strong full-year growth as robust sales in North America and Western Europe offset the impact of weaker currencies in emerging markets. Japan's second-largest automaker by sales reported on Wednesday an operating profit of 192.6 billion yen ($1.68 billion) for October-December, exceeding the average 178.66 billion forecast of 10 analysts polled by Thomson Reuters I/B/E/S/. Nissan overcame a 26.8 billion yen hit in the quarter from weakness in the Mexican peso and other currencies against the U.S. dollar. The automaker said strong sales of pick-up trucks and SUVs in the United States and buoyant demand in Europe would enable it to achieve an earlier forecast for full-year operating profit of 730 billion yen, up 24 percent from the previous year. "We expect solid demand for new models and the encouraging momentum in North America and Western Europe combined with continued cost efficiencies to offset unfavourable market and foreign exchange conditions primarily in emerging markets," Nissan Corporate Vice President Joji Tagawa told reporters. Nissan also kept its full-year currency rate forecast unchanged at 119.4 yen to the U.S. dollar. EXPORTS TO THE U.S. Faced with booming demand for cars in the United States and slumping sales at home, Nissan is among a handful of Japanese automakers revving up production at idle domestic plants to build vehicles for export. As North American production plants churn out its popular Rouge model at full capacity, Nissan said its plant in southern Japan would begin producing the crossover vehicle for export to the United States in spring or early summer. Nissan has also been producing Rogues in South Korea to boost supply for the U.S. market. Other automakers with large offshore production bases are also shifting manufacturing back home, taking advantage of competitive production costs and a relatively weaker currency. Honda <7267.T> is using under-utilised Japanese plants to build its Fit sub compact model bound for North America, and the Jazz model for Europe. The company said it will begin producing gasoline-hybrid versions of its 2016 model Accords in Japan to export to the United States. "This should improve their margins, both from the perspective of taking advantage of a weak yen and improving operating leverage," CLSA senior analyst Chris Turner said referring to the automakers. "If you're looking for where you have any idle capacity to utilise, it comes down to Japan." (Reporting by Naomi Tajitsu; Editing by Miral Fahmy and Muralikumar Anantharaman)