TOKYO (AP) — Nissan lowered its full fiscal year outlook on Thursday, as the Japanese automaker reported a 73% decline in profit in the April-June quarter compared to the previous year.

Chief Executive Makoto Uchida called the results "very challenging," blaming sales incentives and marketing expenses resulting from intense competition, especially in the U.S. market.

Nissan's stock price plunged on the Tokyo Stock Exchange after the earnings were announced, finishing down nearly 7%.

The profit challenges came despite its global vehicle sales holding steady at 787,000, according to Nissan Motor Co., based in the port city of Yokohama.

Quarterly sales edged up 3% to 2.99 trillion yen ($19.6 billion).

The need to optimize inventory also chipped away at profitability. Nissan's fiscal first quarter profit declined to 28.6 billion yen ($187 million) from 105.5 billion yen the previous year.

"Our first quarter results were very challenging. The reasons are clear, and we have implemented measures to recover," Uchida said.

Nissan said it will improve inventory so sales and profits will recover in the second half of the fiscal year. New models are also in the pipeline, according to the maker of the Altima sedan, Z sportscars and Infiniti luxury models.

Nissan lowered its full-year profit forecast to 300 billion yen ($1.9 billion) from an earlier projection of 380 billion yen ($2.5 billion).

It expects to sell 3.65 million vehicles globally in the fiscal year ending in March 2025. In the fiscal year that ended in March 2024, Nissan sold about 3.4 million vehicles worldwide.

Nissan has been focusing on a sales growth strategy called "The Arc" based on electric vehicles. But its performance is ailing in key markets such as the U.S. and China.

The global auto industry is undergoing turmoil amid growing concerns about sustainability and the environment, as consumers turn to EVs, fuel cells and other green models. Drivers are also looking to the use of artificial intelligence and other technologies for safer and cleaner driving.

Such changes mean opportunities for newcomers, including various Chinese makers, as well as Tesla of the U.S., while bringing risks for established automakers like the Japanese.

Japan's top automaker, Toyota Motor Corp., reports financial results next week. Honda Motor Co. reports early next month.

Nissan is promising to mass produce electric vehicles powered by next-generation batteries by early 2029.

___

Yuri Kageyama is on X: https://twitter.com/yurikageyama