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U.S. Corporate Profits Rose 10.7 Percent In ’93 With AM-Economy, Bjt

March 31, 1994

WASHINGTON (AP) _ Profits at U.S. corporations soared 10.7 percent last year, the best showing in three years.

The Commerce Department also reported Thursday that after-tax corporate profits in the fourth quarter of 1993 rose 8.4 percent, to a $297.4 billion seasonally adjusted annual rate.

The fourth-quarter rise is the largest for any three-month period since an 11.9 percent gain in the last quarter of 1992. The full-year performance is the best since a 12.6 percent advance in 1990.

Some economists said the report could prove to be a prop for the stock market when interest rates stabilize and current inflation fears ease. The market has suffered a loss of about 9 percent in the value of shares in the past two months.

The robust corporate profits have helped give companies cash to buy efficiency-enhancing computers and machinery, an area of spending that was among the strongest sectors of the economy last year.

The Commerce Department reported that before-tax profits rose 10.6 percent in the final three months of 1993 to a rate of $491 billion, after a 0.4 percent drop in the third quarter.

Dividend payments to stockholders edged up 0.4 percent, to a $170.3 billion rate, after a 0.7 rise the previous quarter.

Cash flows from current production, the funds that corporations have available for investment, increased 3.2 percent to a seasonally adjusted annual rate of $560.6 billion after a 4.2 percent rise in the July-September quarter.

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