Gross operating profits fell 2.9 percent from the second quarter, when they declined a revised 0.3 percent, the Bureau of Statistics said in Sydney today. The result compares with the median forecast for a 3 percent drop in a Bloomberg survey of 20 economists. Inventories swelled 1.1 percent, compared with analysts’ prediction for a 0.4 percent gain.
Reserve Bank of Australia Governor Glenn Stevens will likely lower the nation’s benchmark interest rate to 3 percent tomorrow, according to most economists surveyed by Bloomberg News. A high currency has hurt earnings for non-resource industries, and the price of iron ore, which made up more than 20 percent of exports last year, dropped as much as 37 percent last quarter.
The result reflects a “sharp fall in mining profits as bulk commodity prices fell sharply,” Andrew McManus, an economist at Australia & New Zealand Banking Group Ltd., said in a research report before today’s release.
From a year earlier, profits declined 13 percent, today’s report showed.
Earnings at mining companies slumped 12.2 percent in the third quarter and wholesale trade dropped 10.4 percent, according to today’s report. Profits at manufacturers rose 10.8 percent and earnings at utilities climbed 3.6 percent.
Yancoal Australia Ltd., the third-biggest standalone coal producer in Australia, said Oct. 30 that it expects a third- quarter loss of A$7.4 million ($7.7 million) after tax.
Harvey Norman Holdings Ltd., Australia’s largest electrical-goods retailer, said first-quarter earnings probably fell about 20 percent as it closed stores and sales dropped 10 percent.
Gross operating profit measures earnings before tax, interest, depreciation and amortization. It excludes asset sales and foreign-exchange gains or losses.
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