Canadian corporate profits rose to $80.9 billion in the second quarter bolstered by big gains in the financial services sector, Statistics Canada reports.
Data released Thursday (August 27) shows a 12.9% bounce in operating profits from the previous quarter.
The biggest winner was financial services, where profits rose $8.5 billion to $25.6 billion.
“Nonetheless, profit growth was not widespread. Operating profits only increased in 11 of 22 industries,” TD economist Leslie Preston said in a note to investors.
Oil and gas extraction posted an operating loss of $379 million in the second quarter compared with the $1.2 billion loss the previous quarter.
“This was not an overwhelmingly positive report. Profit growth outside of the financial sector was very modest and profits remain below year-ago levels,” Preston said, adding financial sector profits are frequently volatile and this sector only managed its 49% increase in profits after two consecutive quarters of big declines.
“That said, TD does expect the Canadian economy to return to growth in Q3, and weakness in corporate profits should abate alongside improvement in the broader economy.”
