Quarterly financial statistics for enterprises, second quarter 2014
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Canadian corporations earned $87.8 billion in operating profits in the second quarter, up 2.6% from the previous quarter. This gain followed a 3.8% increase in the first quarter. Overall, operating profits were up in 13 of 22 industries.
In the non-financial sector, operating profits grew 0.8% to $66.4 billion in the second quarter, following a 9.8% increase in the previous quarter.
In the financial sector, operating profits rose 8.8% to $21.4 billion following a 12.3% decline in the first quarter. Most of the increase in the second quarter came from the insurance industry.
On a year-over-year basis, operating profits for Canadian corporations increased 6.8% compared with the second quarter of 2013. Profits rose 15.8% in the non-financial sector, while they fell 13.9% in the financial sector.
Operating profits in manufacturing decreased 1.9% to $14.3 billion in the second quarter, with 7 of 13 industries reporting gains.
Profits in the petroleum and coal products manufacturing industry fell 17.8% from the record levels seen in the first quarter to $3.8 billion. While operating revenues were at record levels, higher depreciation and other expenses resulted in increased levels of operating expense for the industry.
Strong growth in the second quarter resulted in the highest operating revenues for the motor vehicle and parts manufacturing industry since 2007, up 6.5% to $29.2 billion. However, operating profits fell 22.1% to just over $1.0 billion in the second quarter as manufacturers' expenses increased. Auto plants added shifts and spent more on overtime to meet strong product demand in the second quarter, after poor weather in the first quarter hampered the movement of parts and autos.
The largest increase in operating profits in the manufacturing sector was in the computer and electronic products manufacturing industry, which posted a $501 million gain. This was the second quarterly profit for this industry since 2012.
Profits for primary metal manufacturing rose 64.5% to $777 million.
Operating profits in wholesale trade grew 9.0% to $8.4 billion.
Machinery, equipment and supplies wholesalers led the gains in the second quarter with a 19.2% increase in operating profits to $1.9 billion. Motor vehicle and motor vehicle parts and accessories wholesalers also experienced a strong quarter as they saw profits more than double to $570 million.
The retail sector posted its third consecutive decline in operating profits, falling 20.8% to $3.1 billion. Operating profits for food and beverage stores declined for the fifth consecutive quarter, and for the first time on record posted an overall operating loss.
Motor vehicle and parts dealers, in turn, continued to show signs of strength in the second quarter with profits up 9.0% to $584 million on record retail sales.
A turnaround in profits for insurance carriers in the second quarter (up $1.8 billion) contributed the most to the growth in operating profits in the financial sector, which rose 8.8% to $21.4 billion.
Securities and other financial investment activities reported profits of $6.9 billion, up 8.0% from the previous quarter.
However, profits for depository credit intermediaries declined 6.9% to $10.0 billion, after a 14.1% gain in the previous quarter.
Note to readers
Quarterly financial statistics are compiled using financial information provided by enterprises that derive this data from their financial statements. Starting 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 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 2014 have been revised. For more information on seasonal adjustment, see Seasonally adjusted data – Frequently asked questions.
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 on CANSIM at the national level for 22 industry groupings.
The second quarter 2014 issue of 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 25.
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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 Daniel Agoussi (613-951-2658; email@example.com), Industrial Organization and Finance Division.