Nissan’s quarterly profit rose as the carmaker sought to build on progress from the early stages of its restructuring plan.

The Japanese carmaker reported ¥78 billion ($497 million) in operating profit during the quarter ending June 30, the company said Monday, exceeding analysts’ estimates of ¥6 billion and marking a big improvement from the ¥79 billion loss a year earlier. Net sales were ¥3 trillion, in line with projections.

Nissan kept its ¥200 billion profit and ¥13 trillion revenue outlook for the fiscal year ending March 2027. The carmaker revised its sales volume outlook to 3.15 million units from 3.3 million, citing a more challenging business environment, particularly in China.

The results offer an early indication of Chief Executive Officer Ivan Espinosa’s bid to stabilize Nissan after years of sliding sales and management turmoil. His turnaround hinges on aggressive cost cuts, a faster vehicle-development cycle and stronger performance in the U.S. and China, even as the carmaker contends with currency swings, rising input costs and intensifying competition from Chinese rivals.

“We made considerable progress in our cost-saving efforts,” Espinosa said in a briefing. “However, global industry challenges, particularly in China and the Middle East, have affected parts of our business.”

The total sales volume of China’s automobile industry declined by 22% between January and June, Espinosa said, while Nissan’s sales declined 15%. In the Middle East, where the U.S. conflict with Iran is ongoing, Nissan has identified alternative supply routes, but continued uncertainty will affect profitability until supply chains normalize.

Outdated products, revolving-door leadership and a failed tie-up with Honda have left the Japanese carmaker struggling to fend for itself in the global automobile industry’s rapid shift toward software-focused, battery-powered cars.

Nissan, in rough standing after posting losses for the past two fiscal years, is saddled with ¥4.4 trillion in debt and rating agencies have cut its creditworthiness status to junk.

Several shareholders voiced their grievances with leadership at the company’s annual meeting in June, with many pointing to the dismal performance of its share price and a dearth of compelling products.

Despite its pioneer status with gas-electric hybrids and battery-electric vehicles, Nissan has squandered its lead on both fronts in the U.S. and China. In China, it touted an ambitious growth plan to reach 1 million cars in annual sales by the end of the decade. On top of that, it plans to export hundreds of thousands of vehicles from China to other parts of the world.