Canadian quarterly oil and banking profits rise
CanWest News Service
OTTAWA -- The energy and banking industries spurred a 5.8-per-cent
surge in Canadian third-quarter operating profits to a record high
$67 billion, Statistics Canada reported Thursday. At least one
analyst, however, warns the days of record profits may be coming to
an end.
Oil and banking accounted for almost half of the country's gains in
operating profits, the government agency said. The biggest profit
increases posted in the manufacturing sector were in motor vehicles,
although these came largely as a result of charges booked against
profits in the second quarter.
Oil and gas industries profits were the highest in four quarters,
rising 9.6 per cent to $8 billion.
Financial industry profits climbed to $19.4 billion, up 6.2 per cent.
Bank profits have risen for six consecutive quarters, with the
chartered banks posting all-time high operating profits of $8 billion.
Nevertheless, the rise of the Canadian dollar and the impact of the
asset-backed commercial paper (ABCP) crisis will quickly deflate this
trend, says J.P. Morgan economist Ted Carmichael.
The Canadian dollar's fourth-quarter gains of 7.4 per cent versus the
U.S. dollar "points to about a four-per-cent decline in manufactured
goods prices, which is expected to seriously squeeze manufacturing
profits," Carmichael said.
"Financial sector profits are likely to decline in 4Q as ABCP losses
are recognized. This combination is likely to see a sharp decline in
economy-wide operating profits in 4Q."
In its report, Statistics Canada said profits in non-financial
industries gained 5.7 per cent to $47.5 billion, after falling 0.4
per cent in the second quarter.
Wood and paper manufacturers managed to carve out a small gain of
$100 million in the quarter, although these amounts remain
significantly lower than the high of $2 billion reached in the second
quarter of 2004.
Retailers gained 3.9 per cent to $4.1 billion, while information and
cultural industries' profits grew to $3.4 billion from $2.7 billion.
Percentage change in profits (third quarter from second quarter):
All industries
Operating revenue +0.5
Operating profit +5.8
After-tax profit + 6.7
Non-financial
Operating revenue +0.3
Operating profit +5.7
After-tax profit +9
Financial
Operating revenue +2.9
Operating profit +6.2
After-tax profit +0.8
©CanWest News Service 2007
