Nissan Motor Co., Ltd. expects to report an operating loss of 275 billion yen (approximately $1.8 billion) for the current fiscal year, as the automaker intensifies cost-cutting measures to address deteriorating financial conditions. Following the announcement, shares of the struggling company saw their steepest decline in two months.

This marks Nissan's first earnings forecast for the fiscal year ending March 2026, as the company had previously refrained from providing profit guidance. Additionally, Nissan anticipates a loss of 30 billion yen for the first half of the fiscal year (April-September), an improvement over its earlier projection of an 180 billion yen loss.

"Nissan continues to face multiple challenges, and external headwinds have further exacerbated these difficulties," said Chief Financial Officer Jeremie Papin on Thursday.

In early Friday trading on the Tokyo Stock Exchange, Nissan shares fell as much as 6.1%, marking the largest intraday drop since August 26. Year-to-date, the stock has declined roughly 27%. At the time of reporting, Nissan's U.S.-listed shares were down 2.26%.

The automaker is grappling with its most severe financial crisis in over two decades, reminiscent of its near-collapse in the early 2000s when it was rescued by Renault SA. Nissan now contends with plummeting profits, mounting debt, and a host of operational challenges—including frequent management reshuffles, a weak product lineup, and sluggish sales in key markets like the U.S. and China.

Earlier this year, CEO Ivan Espinosa pledged aggressive cost-cutting measures, including plans to cut 20,000 jobs and reduce global production sites from 17 to 10 to address overcapacity. Specific actions involve relocating production from the Civac plant in Mexico to the Aguascalientes complex by the end of this fiscal year and shuttering its flagship Oppama plant in Japan by March 2028.

Analyst Tatsuo Yoshida noted that Nissan's narrower first-half loss was not due to operational improvements but rather one-time cost adjustments. "It remains unclear whether restructuring efforts will proceed as planned," he cautioned.

CFO Papin attributed the reduced losses to expenses related to U.S. emissions regulations, legacy liabilities, and other "one-time factors and deferred costs." Nissan has yet to disclose restructuring expenses or provide full-year net profit/loss guidance, with further details expected in its earnings report on November 6.