• Company gross operating profits rose 20.1 per cent in the December quarter, new data shows. (AAP)
Australian companies were good at managing expenses and securing revenue growth in the December quarter, with profits soaring 20.1 per cent, an economist says.
Source:
AAP
27 Feb - 1:28 PM 

Australian company profits hit record highs in the December quarter, lifted by the mining and financial services sectors.

Company gross operating profits rose 20.1 per cent in the quarter, lifting annual profits by 26.2 per cent, according to seasonally adjusted figures from the the Australian Bureau of Statistics on Monday.

Commodity prices helped miners' profits soar 49 per cent, while financial services company profits skyrocketed 108 per cent.

CommSec chief economist Craig James said the economy was clearly moving into brighter times, although he was hesitant about the quarterly figures.

"Profits are near record highs, but trending sideways. It was also a very, very good reporting season for listed companies," he told AAP.

Mr James said Australian companies had been very good at managing their expenses and securing growth in revenue in uncertain times.

"Now the question for many companies is what to do with their war chest of funds - reinvest it back into themselves, give it to their shareholders or use it for mergers and acquisitions," he said.

"That's a nice problem to have."

Despite the good profit figures, inventories rose just 0.3 per cent in the quarter and 1.6 per cent annually, which UBS economists said would drag on December quarter gross domestic product, due to be reported on Wednesday.

Estimated growth in wages and salaries also fell 0.5 per cent quarter but rose 1.0 per cent in the year.