Corporate profits drop in first quarter by most since 2008 Great Recession

American corporate profits drop 13.9% in first three months of 2020, Q2 expected to be worse

The numbers: U.S. corporate profits fell 13.9% in the first quarter, the Commerce Department said Thursday. That is the largest decline since the fourth quarter of 2008 during the Great Recession. The decline is not annualized. Profits were $1.84 trillion annualized in the first quarter, down from $2.13 trillion in the last three months of 2019.

What happened: Domestic profits fell 14.9% in the first quarter, with profits from abroad down 10.8%. Over the past year, corporate profits are down 8.5%.

Big picture: The decline shows how the coronavirus pandemic and the resulting business shutdown have damaged the economy. Companies have seen sharp drop in revenue and costs have gone up at the same time.

The Beige Book report released Wednesday showed most businesses remained pessimistic about the outlook.