Canadian corporate profits fell 4.9 per cent to $64 billion in the April-June period from the first three months of 2011, Statistics Canada reported Thursday.
That followed a gain of 7.2 per cent in the previous period.
Income fell in 14 of 22 industries. Manufacturing profits fell 8.3 per cent, with the biggest part of that — two thirds — accounted for by lower earnings by oil, gas and coal firms, which made $2.2 billion — a drop of 24.1 per cent from the previous quarter.
Profits in the financial sector were down 7.9 per cent, dragged down by a 42 per cent drop at insurance carriers.
Income for retailers decreased 5.7 per cent to $3.4 billion, as profits for clothing, department and other general merchandise stores declined 6.6 per cent to $754 million.
Still, Canadian corporate earnings were still 10.2 per cent higher than the same period in 2010.
"Today's report shows that corporate profits fell in (the second quarter), consistent with the Canadian economy as a whole, which likely stalled," Leslie Preston of TD Economics said in a commentary.
"That said, the fact that profits continue to run at a double-digit pace year-on-year should help underpin strong business investment growth in (the second quarter) — one of the key bright lights in an otherwise dim quarter."
Preston predicted corporate profits will continue to fall over the next three to six months, given commodity prices have dropped and more modest economic growth in the economy as a whole is expected to restrain profits at non-resource sector companies.