In retail trade, operating profit increased by $446 million (+4.4%) in the second quarter, reaching $10.6 billion. The increase was led by clothing, sporting goods, and general merchandise stores, which saw operating profit rise by $286 million (+9.1%), driven mainly by a gain of $1.1 billion (+2.5%) in operating revenue in the quarter, reported Statistics Canada on Monday.
But the federal agency said second quarter operating profit for Canadian corporations declined $3.2 billion (-1.7%) from the first quarter, totalling $190.9 billion. The decline was primarily driven by reduced profit in non-financial industries. Despite the quarterly drop, operating profit rose by $2.9 billion (+1.6%) compared to the same quarter last year.
“Operating profit for the non-financial industries fell by $4.0 billion (-3.8%) to $100.8 billion in the second quarter. Decreases were recorded in 13 of 39 non-financial industries,” explained Statistics Canada.
“In contrast, operating profit for the financial industries rebounded after two consecutive quarters of decline, rising $776 million (+0.9%) to $90.1 billion in the second quarter, with 6 of 13 industries posting quarterly gains.”
Statistics Canada said the oil and gas extraction led the non-financial industries’ decline, reporting reduced quarter-to-quarter operating profits of $2.9 billion (-26.2%) in the second quarter. This decrease was driven by falling crude oil prices amid concerns over a potential global oversupply, along with lower exports and wildfire-related production shutdowns during the quarter.
The pipeline transportation industry saw its operating profit decline by $283 million (-17.3%) in the second quarter, partly driven by a temporary shutdown of a pipeline in the northern United States following a rupture, it said.
“Financial industries report gains in operating profit. Among financial industries, property and casualty insurance carriers led the increase in operating profit, up $903 million (+26.8%) in the second quarter. The increase was attributable to lower claims, in part due to favourable weather conditions,” noted Statistics Canada.
“Credit card issuing, sales financing and consumer lending was up $336 million (+8.3%) in the second quarter due to higher operating revenues from its non-interest income segment.
“The banking and other depository credit intermediation industry’s operating profit declined by $566 million (-2.1%) in the second quarter. The decrease was largely due to higher expenses from provisions for credit losses (+30.6%), though this was partially offset by higher net interest income (+1.2%), supported in part by growth in residential mortgages.”
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