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The following is the text of Canada’s financial statistics report for the third quarter released by Statistics Canada.
Canadian corporations earned $72.2 billion in operating profits in the third quarter, up 3.7% from the previous quarter. This increase follows a 7.0% decrease in the second quarter.
Operating profits increased in 14 of 22 industries. Manufacturing industries led the overall increase, accounting for nearly 30% of the $2.6 billion rise in operating profits over the second quarter.
In the non-financial sector, third-quarter operating profits rose 3.7% to $52.9 billion, following a 5.7% decrease in the previous quarter. The majority of the third-quarter increase came from the manufacturing industries, while most other non- financial industries experienced little change.
In the financial sector, operating profits increased 3.7% to $19.2 billion, following a 10.5% decline in the second quarter. Most third-quarter gains came from depository credit intermediaries.
On a year-over-year basis, operating profits for Canadian corporations were 3.1% higher in the third quarter. Profits fell 2.5% in the non-financial sector, while they rose 22.7% in the financial sector.
Operating profits in manufacturing increased 6.3% to $12.4 billion in the third quarter.
Increases were reported by 4 of 13 manufacturing industries, led by petroleum and coal products manufacturers. Their operating profits increased 54.2% to $4.3 billion as production rebounded following partial shutdowns at several plants for retooling and maintenance work.
Without this growth in operating profits in the petroleum and coal manufacturing industry, manufacturing profits would have fallen by nearly $800 million.
Profits for chemical, plastics and rubber products manufacturers fell 11.7% to $1.8 billion.
Operating profits of motor vehicles and parts manufacturers declined 18.9% to $768 million.
Primary metal manufacturing profits fell 19.4% to $624 million.
Profits for information and cultural industries rose 7.6% to $5.5 billion. Most of the increase came from the telecommunications industry, where profits rose 8.1% to $4.0 billion.
Profits in transportation and warehousing rose 14.6% to $2.9 billion.
Oil and gas extraction and support activities profits fell 1.3% to $2.2 billion.
Retailers’ profits increased 1.8% to $4.1 billion, while wholesalers’ profits rose 3.4% to $5.8 billion.
The third-quarter increase of 3.7% in the financial sector was driven by depository credit intermediaries, whose operating profits rose 7.2% to $10.7 billion. At the same time, profits for insurance carriers declined 11.7% to $1.3 billion.
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 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 data for the first and second quarters of 2012 have been revised. For more information on seasonal adjustment, see Seasonal adjustment and identifying economic trends (http://www5.statcan.gc.ca/bsolc/olc-cel/colc-cel?catno=11-010- X201000311141&lang=eng) .
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.
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