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Australian business profits rose for the first time in five quarters as earnings at wholesalers, hotels and restaurants gained.

Gross operating profits advanced 2.2 percent in the three months through December from the previous quarter, when they declined a revised 1.4 percent, the Bureau of Statistics said in Sydney today. The median estimate of 15 economists surveyed by Bloomberg News was for a 3 percent gain.

Today’s report adds to evidence of an economic rebound that may prompt the central bank to raise the benchmark interest rate tomorrow for the fourth time in five meetings. Australia’s economy probably grew the most in 1 1/2 years in the fourth quarter, a separate analysts’ survey ahead of a report on March 3 shows, boosted by A$22 billion ($20 billion) in spending by Prime Minister Kevin Rudd on roads, ports and schools.

Income from companies “looks OK, and they should improve further” in 2010, said Stephen Roberts, a senior economist at Normura Australia Ltd. in Sydney. “They’ve cut back a bit on costs and by this time next year we should have a big positive annual gain” in earnings.

Profits declined 11.2 percent in the fourth quarter from a year earlier, today’s report showed.

The Australian dollar fell to 89.84 U.S. cents at 12:03 p.m. in Sydney from 89.89 cents just before the report was released. The two-year government bond yield dropped 1 basis point to 4.58 percent. A basis point is 0.01 percentage point.

Supermarkets

Woolworths Ltd., Australia’s biggest retailer, said last week that first-half net income rose 11 percent to A$1.1 billion on increasing profitability at its supermarkets.

Goodman Fielder Ltd., the nation’s largest baker, said on Feb. 25 that first-half profit increased 25 percent after it cut manufacturing expenses and added new bread brands.

While some economists say concerns about sovereign debt in Europe and financial-markets turmoil may prompt central bank Governor Glenn Stevens to wait another month to increase borrowing costs tomorrow, 14 of 19 analysts surveyed by Bloomberg predict he will boost the benchmark rate by a quarter percentage point to 4 percent.

Boosting the benchmark rate tomorrow would make Stevens the first central banker from a Group of 20 economy to raise borrowing costs this year quick payday loans. He was also the first in the world to increase rates three times last quarter, when he raised the key rate in three quarter-point steps to 3.75 percent from a half- century low of 3 percent.

Business Investment

Profits at construction companies declined 2.7 percent in the fourth quarter and manufactures advanced 8.1 percent, today’s report said. Wholesale traders jumped 29 percent and hotels and restaurants gained 28.5 percent.

A report published last week showed business investment jumped in the fourth quarter at almost three times the pace predicted by analysts as companies raised their forecasts for investment plans to the highest level in five years.

BHP Billiton Ltd., the world’s largest mining company, said last month it will increase capital spending on iron-ore mines and oil fields by 63 percent next year to $20.8 billion from $12.8 billion this year.

Rising Chinese demand for Australian iron ore and coal is stoking a record boom in mining investment that may last more than a decade, central bank Deputy Governor Ric Battellino said on Feb. 23. Investment in new mines, ports and infrastructure may reach 6 percent of gross domestic product, more than double the amount spent during the last resources boom in the late 1970s, he said.

Faster Growth

GDP probably rose 0.9 percent in the fourth quarter from the previous three months, when it gained 0.2 percent, according to the median estimate of 18 economists surveyed by Bloomberg News. The economy probably expanded 2.4 percent from a year earlier, they said. The figures will be released at 11:30 a.m. on March 3.

Inventories held by companies gained 0.2 percent in the fourth quarter from the previous three months, today’s report showed. Economists forecast a 0.5 percent increase.

Retail sales rose 0.5 percent in January after falling in December for the first time in five months and building approvals gained for a third straight month, according to Bloomberg surveys of analysts ahead of reports to be released tomorrow.

Gross operating profit measures earnings before tax, interest, depreciation and amortization. It excludes asset sales and foreign-exchange gains or losses.

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