Nissan Motor saw first-quarter profit almost completely wiped out Thursday and slashed its annual outlook, as deep discounting in the United States shredded the Japanese automaker¡¯s margins.

The results were far short of analyst estimates and sent Nissan¡¯s shares down 7%. Investors will now likely have to worry about the car maker¡¯s outlook in the United States, a fresh concern for a company already fighting to turn around its fortunes in another critical market, China.

Operating profit for the April-June period totaled ?995 million ($6.5 million), compared with ?128.6 billion in the same period a year earlier, and just a sliver of the ?164.4 billion predicted in a poll of five analysts by LSEG.

¡°Our first quarter results were very challenging. The reasons are clear, and we have implemented measures to recover our performance,¡± CEO Makoto Uchida said in a statement.

He said the automaker was ¡°optimizing inventory buildup¡± in the United States and would focus on the quality of sales. Nissan also plans to bolster sales from new and refreshed models in the second half of the financial year, he said.

It was Nissan¡¯s worst quarterly performance in more than three years. The automaker cut its operating profit forecast for the financial year by 17% to ?500 billion from ?600 billion.

The weak result was ¡°mainly due to an increase in selling expense resulting from increased competition,¡± Nissan said in a filing, highlighting the challenge of deep competition in the United States.

While global sales remained even compared to the same period of the previous year at 787,000 units, profit was impacted by increased sales incentives and marketing expenses to meet intense sales competition and optimize inventory, particularly in the United States, it said.

Nissan¡¯s shares were hit hard after the results, at one point falling some 11%. They were down 6.7% in late afternoon trade in Tokyo.

The tribulations in the United States ¡ª it said U.S. sales dropped primarily due to an aging portfolio and a market shift to hybrid vehicles ¡ª add to Nissan¡¯s woes in China, where it has been looking to regain ground amid tough competition from local giants.

The Yokohama-based automaker said last month it halted production at one of eight factories it operates through a joint venture with Chinese partner Dongfeng Motor as it seeks to optimize operations.