Quarterly financial statistics for enterprises, second quarter 2013
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Canadian corporations earned $72.2 billion in operating profits in the second quarter, down 0.8% from the previous quarter. This decline followed a 2.8% decrease in the first quarter. Overall, operating profits were down in 10 of 22 industries.
In the non-financial sector, operating profits fell 3.9% to $51.1 billion in the second quarter, following a 0.5% decrease the previous quarter. Manufacturing industries led the decline with a 16.6% drop to $9.9 billion.
In the financial sector, operating profits increased by 7.6% to $21.1 billion in the second quarter, following an 8.5% decline in the first quarter. Most of the gain in the second quarter came from life, health and medical insurance carriers.
On a year-over-year basis, operating profits for Canadian corporations increased 1.4% compared with the second quarter of 2012. Profits fell 1.4% in the non-financial sector and rose 9.1% in the financial sector.
Operating profits in manufacturing fell for the third consecutive quarter, down 16.6% to $9.9 billion in the second quarter.
Overall, 8 of 13 manufacturing industries reported declines.
Operating profits for petroleum and coals products manufacturing led the decline, falling 49.2% to $1.6 billion in the second quarter. Profits fell because of a variety of factors, including maintenance downtime, pipeline outages and lower industry margins.
Primary metal manufacturing profits fell by two-thirds (-66.6%) to $126 million in the second quarter, while chemical, plastics and rubber products manufacturing profits rose 5.1% to $2.5 billion.
In other sectors, operating profits in construction were down 8.8% to $3.8 billion.
Real estate and rental and leasing profits fell 7.0% to $4.4 billion.
Profits in transportation and warehousing declined 5.8% to $3.5 billion.
Wholesalers' profits fell 3.5% to $5.7 billion in the second quarter. This was mainly the result of a 9.1% reduction in operating profits for other wholesalers-distributors, such as distribution centres. These businesses, which support and supply retail operations, saw operating profits fall to $2.0 billion. Retailers' profits increased 1.5% to $4.0 billion, with "other retailers" leading the gain in the second quarter.
Oil and gas extraction and support activities profits rose by 49.2% to $1.9 billion. This increase was spurred on by strong sales, while expenses were stable.
Following the first quarterly decline in four quarters, operating profits in the financial sector bounced back in second quarter, rising 7.6% to $21.1 billion.
An increase of $776 million by life, health and medical insurance carriers accounted for more than half of the gain in operating profits in the financial sector.
Banking and other depository credit intermediation profits increased 2.9% to $8.8 billion in the second quarter, while securities, commodity contracts, and other financial investment and related activities rose 4.3% to $5.7 billion.
Flooding in Alberta occurred near the end of the quarter, so the full effect of any claims were not seen on the financial statements reported by property and casualty insurance carriers in the second quarter. Even so, their operating profits fell by 1.3% to $1.4 billion.
Note to readers
Quarterly financial statistics are compiled using financial information provided by enterprises that derive this data from their financial statements. Starting on January 1, 2011, Canadian publicly accountable enterprises are required to replace Canadian Generally Accepted Accounting Principles (CGAAP) with International Financial Reporting Standards (IFRS) when preparing their financial statements for fiscal years starting on or after January 1, 2011. Canadian private enterprises are required to replace CGAAP by Accounting Standards for Private Enterprises (ASPE) or IFRS. The adoption of new accounting standards by some enterprises since the beginning of 2011 may affect comparability with prior periods.
Quarterly profit numbers referred to in this release are seasonally adjusted and are in current dollars. The quarterly financial estimates for the first quarter of 2013 have been revised. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends.
Quarterly financial statistics for the first quarter 2010 forward are based on the 2012 North American Industry Classification System (NAICS). For the period prior to the first quarter 2010 the financial statistics are based on the 2007 NAICS.
Quarterly financial statistics for enterprises are based upon a sample survey and represent the activities of all corporations in Canada, except those that are government controlled or not-for-profit. An enterprise can be a single corporation or a family of corporations under common ownership and/or control, for which consolidated financial statements are produced.
Profits referred to in this analysis are operating profits earned from normal business activities. For non-financial industries, operating profits exclude interest and dividend revenue and capital gains/losses whereas, for financial industries, these are included, along with interest paid on deposits.
Operating profits differ from net profits, which represent the after-tax profits earned by corporations.
Aggregate balance sheet and income statement data for Canadian corporations are now available through CANSIM. They are available at the national level for 22 industry groupings.
The second quarter 2013 issue of the Quarterly Financial Statistics for Enterprises (Catalogue number61-008-X) will be available soon.
Financial statistics for enterprises for the third quarter will be released on November 26.
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To enquire about the concepts, methods, or data quality of this release, contact Daryl Keen (613-951-1810); firstname.lastname@example.org) or Philippe Marceau (613-951-4390; email@example.com), Industrial Organization and Finance Division.