Nissan Motor Co <7201.T> forecast a better-than-expected 14.4 percent fall in annual operating profit on Thursday, defying a quake-induced setback in the past few months and projecting another year of record sales.

Japan's No. 2 automaker forecast an operating profit of 460 billion yen ($5.7 billion) for the year to March 2012, above an average forecast of 432 billion yen in a survey of 21 analysts by Thomson Reuters I/B/E/S.

Despite the lingering disruption to production from the March 11 earthquake, Nissan said it would boost sales by 9.9 percent to 4.60 million vehicles this year, offering a rosier outlook than rivals Toyota Motor Corp <7203.T> and Honda Motor Co <7267.T>, which have both forecast a sales decline.

We're pretty confident that the supply will be there, Nissan Chief Executive Carlos Ghosn told a small group of reporters in an interview after the announcement. He added that with fewer than 10 suppliers affected by the disasters now, he hoped production would fully return to normal before an October target.

The (sales) volume is stronger than what anyone expected, said Kurt Sanger, analyst at Deutsche Securities.

A day earlier, Ghosn had flagged a positive surprise, telling a Thomson Reuters Newsmaker event that the sales forecast would call for significantly higher volumes compared with last year.

Nissan expects net profit of 270 billion yen, down 15.4 percent from last year, assuming an average dollar rate of 80 yen and euro of 115 yen. Revenue is seen rising 7.1 percent to 9.4 trillion yen, and Nissan plans to double its dividend to 20 yen this year.

Before the forecasts, Nissan's shares ended up 1.3 percent, taking a cue from Ghosn's bullish comments on Wednesday.

NEXT PHASE OF GROWTH

Nissan has been charging ahead in China and has been laying the groundwork for industry-beating growth in other emerging markets such as India and Russia. Plans to accelerate growth in Brazil are also in the pipeline and will be announced soon, Ghosn said.

But Ghosn, also CEO of Renault SA , stressed that Nissan's next phase of growth would not rely solely on developing markets but also on expansion in the United States. During the first phase of the six-year growth plan to be unveiled on Monday, Ghosn said he wants Nissan to nab a share of 10 percent in the world's second-biggest market.

I think this is a reachable and obvious milestone. Nissan had 8.0 percent of the U.S. market in 2010/11.

Ghosn said the mid-term plan would lay out market share goals and strategies in products and technology, with specific financial targets for the first three-year phase. Nissan will not give a vehicle sales target in the plan, he said.

Nissan's operating profit forecast for this year exceeds the guidance provided by Toyota and Honda, which expect 300 billion yen and 200 billion yen respectively. Toyota and Honda, unlike Nissan, report under U.S. accounting standards, meaning their profits made in China are excluded from the operating line.

By region, Nissan sees sales in China, its biggest market, rising 12.3 percent to 1.150 million vehicles, and growing 7.7 percent in the United States to 1.04 million vehicles.

In Europe, it expects growth of 10.4 percent to 670,000 cars, while sales in Japan are seen rising 1.7 percent to 610,000.

Nissan has managed to spread out its sales regionally, and its strength lies in the anticipation of brisk growth in emerging markets, said Yoshihiro Okumura, general manager of research at Chibagin Asset Management.

One concern is whether it will be able to prop up profit margins as it grows in those markets, he added, referring to the popularity of cheaper cars there.

Ghosn sought to dash such worries, saying Nissan would balance its product mix, with higher sales of its premium Infiniti cars on one end and the low-cost V platform line of vehicles on the other.

There is a big potential for global growth for Infiniti, Ghosn said, adding that a road map for the brand's expansion would be laid out on Monday.

Earlier, Japanese automaker Suzuki Motor Corp <7269.T> also unveiled consensus-beating forecasts, sending its shares up 3.1 percent by the close.

(Additional reporting by Mayumi Negishi and Hirotoshi Sugiyama; Editing by Chris Gallagher and Joseph Radford)

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