Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 27, 1993 TAG: 9303270105
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The report said profits totaled $231.8 billion, up from $210.7 billion a year earlier. It was the biggest increase since a 30.9 percent surge in 1988. After dropping by 4.2 percent in 1989, profits jumped 8.5 percent in 1990 before falling 3.7 percent in 1991.
Contributing to the 1992 advance was a 9.2 percent increase in the fourth quarter, to a $242.6 billion seasonally adjusted annual rate, the largest since a 10.8 percent advance during January-March.
Profits had fallen 4.5 percent, to a $222.2 billion rate, from July through September, reflecting insurance company losses from Hurricanes Andrew and Iniki. The report said the storms, which hit Florida, Louisiana and Hawaii, cost insurance carriers about $46 billion.
Sung Won Sohn, an economist with the Norwest Corp. in Minneapolis, said the higher profits came from higher productivity, which raised margins, and economic growth, which boosted sales volumes.
But he said profit performance probably will flatten this year because productivity gains cannot be squeezed out of the economy indefinitely.
"Corporations and most businesses have been laying off people and employing more machines and capital to enhance productivity," he said. "Sooner or later, this will have to slow down."
Among other details in the report:
Before-tax profits were up 10.8 percent, to a $392.2 billion rate, in the final three months of the year. They had dropped 6 percent in the third quarter.
Dividend payments to stockholders rose 3.2 percent, to a $155.9 billion rate, after advancing 3.1 percent the previous quarter.
Cash flow from production, which are the funds that corporations have available for investment, increased 4.4 percent to a seasonally adjusted annual rate of $520.5 billion after rising 1.9 percent from July through September.
by CNB