Corporate profits after taxes rose 0.2 percent in the third quarter led by gains for transportation and financial companies, utilities and non-financial industries, the Commerce Department reports.

Corporate profits from current production decreased $2.8 billion in the third quarter to a seasonally adjusted annual rate of $323.7 billion, the department's Bureau of Economic Analysis said.After taxes, however, profits jumped 0.2 percent to a seasonally adjusted annual rate of $163.1 billion and dividends increased $2.6 billion to $105.7 billion, the bureau said.

David Wyss, chief economist for Data Resources Inc. in Lexington, Mass., said most analysts had been looking for a slight drop in after-tax profits.

"The profit numbers came in a little stronger than anticipated and that has to be good news for the stock market," even though the 0.2 percent rise was the smallest this year, Wyss said.

Profits from current production dropped in the third quarter for most manufacturers, both in heavy industry and consumer goods, the bureau said. By contrast, profits for the transportation and public utilities group and other non-financial industries increased, the bureau said.

Financial corporations showed the best performance of all, the bureau said.

The foreign component of corporate profits dropped $300 million in the third quarter, after increasing $5.2 billion in the second, the bureau said.

The foreign component includes receipts of dividends from foreign companies by U.S. residents and reinvested earnings by foreign affiliates of U.S. corporations, after comparable payments to foreign residents were subtracted, the bureau said.