Economic Release
US: Corporate Profits
Date: March 27, 2025 07:30 AM CT
| Actual | Previous | |
|---|---|---|
| After-Tax - Y/Y | 12.1% | 9.2% |
| With Inventory & Consumption Adjustments - Y/Y | 5.9% | 5.9% |
Highlights
After tax corporate profits rise 12.1 percent to $3.631 trillion at an annualized rate in the fourth quarter from the year-ago quarter and are revised higher from the preliminary report.
When including inventory valuation and consumption adjustments, after-tax profits of $3.312 trillion in the fourth quarter are down 6.8 percent compared to the same quarter a year ago and are revised higher.
Taxes on corporate income are up 7.2 percent at a $694.9 billion annual rate and up 7.2 percent when compared to the year-ago quarter.
When including inventory valuation and consumption adjustments, after-tax profits of $3.312 trillion in the fourth quarter are down 6.8 percent compared to the same quarter a year ago and are revised higher.
Taxes on corporate income are up 7.2 percent at a $694.9 billion annual rate and up 7.2 percent when compared to the year-ago quarter.
Definition
Corporate profits are derived from the national income and product accounts and are expressed in several measures. Econoday's focus is on the most relevant measure for the total economy, after-tax profits.
Description
Corporate profits are the lifeblood of investment spending. Profits are the income of a corporation. When profits are strong, then companies will be able to increase their capital spending. This could allow better growth prospects for a company and is likely to increase its underlying value. When corporate profits decline, then capital spending tends to decline. Without the potential for growth, a company could be at a disadvantage, particularly in our global economic environment.
Corporate profits also reveal the health of an organization. When a company's profits are anemic during economic expansion, it suggests that the company is not performing efficiently. The value of an inefficient company is determined by its stock price. Thus weak profits signal lower stock prices. When a company's profits are relatively strong, even during an economic downturn, it usually means that the organization is well-managed. The higher value for this type of company is reflected in a higher stock price.
Corporate profits also reveal the health of an organization. When a company's profits are anemic during economic expansion, it suggests that the company is not performing efficiently. The value of an inefficient company is determined by its stock price. Thus weak profits signal lower stock prices. When a company's profits are relatively strong, even during an economic downturn, it usually means that the organization is well-managed. The higher value for this type of company is reflected in a higher stock price.
