Quarterly financial statistics for enterprises, third quarter 2014
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Canadian corporations earned $90.2 billion in operating profits in the third quarter, up 3.7% from the previous quarter and following a 1.5% gain in the second quarter. Overall, operating profits increased in 13 of 22 industries.
In the non-financial sector, operating profits grew 2.2% to $67.1 billion in the third quarter, following a 1.3% decrease in the previous quarter.
In the financial sector, operating profits rose 8.6% to $23.1 billion, following an 11.3% increase in the second quarter. Most of the increase in the third quarter was almost evenly split between the insurance industry and depository credit intermediation.
On a year-over-year basis, operating profits for Canadian corporations increased 8.8% compared with the third quarter of 2013. Profits rose 12.2% in the non-financial sector, while in the financial sector, profits were unchanged compared with the third quarter of 2013.
Operating profits increased 10.9% in manufacturing to $15.9 billion, with 9 of 13 manufacturing industries reporting gains.
Profits in the petroleum and coal products manufacturing industry rose 25.7% to a record $4.6 billion. While operating revenues fell slightly from record levels in the previous quarter, lower input costs—especially for crude oil—resulted in the increased levels of operating profits for the industry.
The motor vehicle and parts manufacturing industry continued to post strong growth in the third quarter, with operating revenues up 3.9% to $30.6 billion, the highest level since the second quarter of 2007. Operating profits rebounded, rising 26.0% to $1.3 billion after falling 18.3% in the second quarter. Continued strong auto sales along with contained operating expenses made the combined first three quarters of 2014 the most profitable since 2002.
Profits for primary metal manufacturing rose 43.4% to $1.1 billion on strong exports of metals.
Food and soft drink manufacturing profits declined 9.0% in the third quarter to $1.7 billion. In spite of the drop, the first three quarters of 2014 have seen the highest profits on record.
After posting the largest increase in operating profits in the manufacturing sector in the second quarter, the computer and electronic products manufacturing industry fell 39.7% as operating expenses rose, while operating revenues were virtually unchanged.
Oil and gas extraction profits fell 13.0% to $4.8 billion as the expenses associated with exploration rose while operating revenues dipped slightly.
Operating profits in wholesale trade fell 6.1% to $7.9 billion.
Machinery, equipment and supplies wholesalers accounted for much of the decline in the third quarter with operating profits down 24.4% to $1.5 billion. Food, beverage, tobacco and farm product merchant wholesalers also saw lower profits, down 21.6% to $853 million.
The retail sector rebounded following a string of consecutive declines dating back to the third quarter of 2013. Operating profits rose 37.5% to $4.0 billion. A turnaround in operating profits for food and beverage stores was almost entirely responsible for the increase, with profits rising from a $204 million loss in the previous quarter to a $730 million profit.
Motor vehicle and parts dealers continued to show signs of strength in the third quarter, with profits up 11.6% to $618 million on record operating revenues.
Transportation and warehousing profits declined 3.9% to $4.1 billion, with transportation falling 6.0% to $2.3 billion and pipelines, warehousing and transportation support activities down 1.1% to $1.8 billion.
Operating profits in the financial sector rose 8.6% to $23.1 billion in the third quarter, their highest level since the second quarter of 2013.
Profits for depository credit intermediaries increased 8.9% to $10.7 billion, following a 6.2% decline in the previous quarter.
Insurance carriers reported profits of $2.9 billion, up $846 million from 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 and second quarters 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 through CANSIM. They are available at the national level for 22 industry groupings.
The third quarter of 2014 issue of the Quarterly Financial Statistics for Enterprises (Catalogue number61-008-X) will be available soon.
Financial statistics for enterprises for the fourth quarter of 2014 will be released on February 24, 2015.
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