TOKYO (AP) — Nissan Motor Co.’s profits plunged 14 percent in the latest quarter as U.S. and European sales fell sharply and raw material costs rose.

Net profit in the April-June period fell to 115.8 billion yen ($1.05 billion), down from 134.9 billion yen in the same quarter last year, the Japanese automaker said Thursday.

Sales fell 1.6 percent globally to 2.72 trillion yen ($24.6 billion).

Vehicles sales slumped 9.5 percent in the U.S. to 365,000 units, and fell 12.7 percent in Europe to 162,000 units. Those declines were partially offset by a 6.9 percent rise in sales in China to 336,000 units. Overall, global sales dropped 3 percent to 1.3 million units.

Exchange rate movements also hurt financial results, the company said.

Despite the weak performance, Nissan maintained its forecast for an annual profit of 500 billion yen and sales of 12 trillion yen for the year ending March 31, 2019.

Corporate Vice President Joji Tagawa said the company expects results to improve in the second half of the year with the launch of new models in the U.S., but he cautioned that raw material costs may have a bigger impact on profits than initially forecast.

He told reporters at Nissan headquarters in Yokohama that the impact of U.S. steel and aluminum tariffs has been limited so far, because the company buys most of those materials in the United States.