After-Tax Corporate Profits Sink 17 1/2% in 1st Quarter: Businesses ...
After-tax corporate profits plunged 17 V-i percent in the first quarter as the recession took a serious toll of the nationÛªs businesses, the Commerce Department reported yesterday.</br></br>The drop left profits at a seasonally adjusted annual rate of $118.8 billion, and the decline has been so severe since the recession began last July that a number of economists believe the weak financial position of many businesses will be a drag on the economy even if a recovery begins later this year. In percentage ÐÊ terms, the first quarter plunge was the third largest in the post-war .period.</br></br>Reduced inventory profits, reflecting the rapid slowing of inflation, was one major cause of the overall profits decline. Profits from current operations, which exclude inventory profits, fell only 7.8 percent to an annual rate of $149.9 billion.</br></br>However, first quarter profits from current operations represented only 6.3 percent,of national income, a 1.1 percentage point drop from the fourth quarter and the lowest level of the post-war period.</br></br>income from current operations dropped to a $127.7 billion rate in the quarter, down from $135.9 billion in the fourth quarter of 1981. The first quarter figure constituted