Outside of the energy and financial sectors, corporate profits reached record levels in the fourth quarter of 2014, says National Bank Financial (NBF) in a new report.
While overall operating profits declined 2.8% in the fourth quarter, this was mostly due to the energy sector, where profits were down 13%; and financials, which saw a 9.8% drop. Outside of these two sectors, operating profits were up 1.9% during the quarter; which NBF said reached a new record in Q4, both in terms of their absolute level and as a percentage of operating revenues.
Profits rose in 12 out of 16 non-energy non-financial sectors in the fourth quarter, NBF says; and profits reached record levels in: construction, wholesalers, transportation & warehousing and health care & social assistance.
“Corporate Canada’s financial performance is far from being totally dependent on the fate of energy prices,” NBF says, noting that, while energy and financials constitute a large portion of the TSX market cap; in terms of profits, energy represents only 9.4%, financials are 24.5%, and the rest of the industry accounts for 66%.