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December 20, 2007 |
Profits for Canadian corporations increased 5.8 per cent to a record high of $67 billion in the third quarter, according to recent figures from Statistics Canada. Most of the gains were concentrated in a handful of industries including banks and the oil and gas industry.
Overall profits in the manufacturing sector increased 8.3 per cent to $11.7 billion in the third quarter. Motor vehicle and parts manufacturers earned $0.6 billion in profits, up significantly from less than $0.1 billion in the second quarter due to unusually large operating charges posted in Q2. However, operating profits for vehicle and parts manufacturers have been on a downward trend since peaking at $2.5 billion on the second quarter of 2000, says the report. Petroleum and coal manufacturers' operating profits rose 3 per cent to $3.4 billion, reflecting steady demand and high oil prices. Chemical and plastics producers saw profits fall 10.3 per cent to $1.4 billion.
The chartered banks posted some of the biggest gains in the third quarter with all-time-high operating profits of $8 billion, up 12.2 per cent from Q2 and the sixth consecutive quarterly increase. These figures suggest that the banks have yet to feel the effects of recently announced write-downs of asset-backed commercial papers that may impact fourth quarter results. The share price of the Canadian Imperial Bank of Commerce, for example, recently fell 5.4 per cent in a single day after the bank revealed it may have more than $9 billion of exposure to shaky subprime mortgages in the US through derivative contracts, according
to an article in the Toronto Star.
www.statcan.ca
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