Corporate Profits Drop 1.3%

Q1 2014 adjusted after-tax corporate profits fell 1.3% quarter-over-quarter to $1.88 trillion, according to a Commerce Department report (link opens as PDF) released today .

After increasing 1.9% from Q3 to Q4 2013, this latest report marks the first corporate profit decline since Q4 2012. On a seasonally adjusted basis, Q1 2014's year-over-year 5.3% increase paints a positive light on these latest numbers, but profits still clocked in significantly below Q1 2013's 6% year-over-year boost.

US Corporate Profits After Tax Chart


Diving deeper, both financial and nonfinancial corporations took a sizable corporate profit slide. Adjusting for inventory valuation (effectively removing inventory "profits" from revaluation) and capital consumption (effectively removing tax-based accounting gimmicks), financial corporate profits fell $70.6 billion, while nonfinancial corporate profit dropped $102.3 billion. 

Despite the decline in overall profit, corporate taxes actually increased from Q4 2013 to Q1 2014, up 6.1% to $457 billion. For the same period, net dividends dropped off 9.4%, nearly erasing Q4 2014's 10.5% quarter-to-quarter gain. 

This report serves as the Commerce Department's preliminary estimate for Q1 2014 corporate profits. New numbers are scheduled to be released on June 25, along with more industry-level details.

Discover a top stock pick for 2014
Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

The article Corporate Profits Drop 1.3% originally appeared on Fool.com.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.