Operating profit growth at Canadian companies slowed in the third quarter according to a report released by Statistics Canada.

Third quarter operating profits were up 19.7%, year over year, which represents a slowdown from the 26.0% gain in the second quarter.

StatsCan says that non-financial industries lost some ground in the third quarter, as profits slipped 0.6% from the previous quarter to $38.6 billion. One-time charges to operating profits in both the telecommunications and motor vehicle and parts manufacturing industries trimmed third quarter results. Excluding these two industries, the non-financial profits rose by 2.7%.

In the financial sector, profits climbed 2.1% in the third quarter, mainly due to gains by insurance carriers. Chartered bank profits were little changed from the previous quarter. Insurers earned $2.9 billion in operating profits in the quarter, an 8.0% rise from the second quarter. The increase was evenly split between life and property and casualty insurers. The banks, earned $5.2 billion in third quarter profits, little changed from the second quarter but an improvement from the quarterly average profits of $4.5 billion earned in 2003.

Strong global demand, particularly for nickel, copper and zinc, boosted profits of metal mining companies to $1.2 billion in the third quarter, 63.1% ahead of second quarter levels. Operating profits in the oil patch reached $5.6 billion, 0.5% above the second quarter but 21.1% ahead of profits earned a year ago in the third quarter of 2003. And, manufacturers earned $12.5 billion in third quarter operating profits, down slightly from the second quarter but a 45.0% improvement from the third quarter last year. Also, profits in the retail sector were up 5.2% in the third quarter, the fifth straight quarter of growth.

The return on shareholders’ equity improved to 11.5% in the third quarter from 11.1% in the second quarter and 10.0% in the first quarter of 2004. After-tax profits increased 6.0% from the previous quarter, mainly due to currency and capital gains. The operating profit margin slipped to 7.9% in the third quarter from 8.1% in the second quarter, but remained well above the margins of 7.0% earned in the third quarter of 2003.