windfall profit

windfall profit definition - finance
A profit that occurs through no action of a company but is produced by an external event. For instance, oil companies reap windfall profits when oil prices rise due to a system-wide shortage. Electric utilities and traders that have spare generating capacity to sell also may reap windfall profits if prices rise substantially because higher-than-normal temperatures lead to a higher demand for air conditioning, for example.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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