Company gross operating profits, in current prices, rose 5.2 per cent in the quarter, seasonally adjusted, to be up 31.3 per cent over the year, the Australian Bureau of Statistics said.
Economists had expected operating profits to rise by 3.5 per cent in the quarter.
ANZ economist Riki Polygenis said the Reserve Bank of Australia (RBA) would view the outcome as a sign that the domestic economy could avoid a recession.
"I guess it can give them confidence the Australian economy can avoid a recession," she said.
"It shows the business sector overall remains in better financial shape in the latest period of market turbulence than we previously expected."
The ABS data also showed estimated business inventories, in seasonally adjusted chain volume terms, rising 0.7 per cent in the September quarter after rising 0.8 per cent in the previous quarter.
The September quarter result was 4.1 per cent higher than a year ago.
Economists were expecting an 0.7 per cent rise in the September quarter.
Polygenis said the strong company profit figure means gross domestic product data for the September quarter due on Wednesday may be higher than expected.
It also reduces the chance of a 100 basis point interest rate cut by the RBA following its monthly board meeting on Tuesday.
"At the margin, it gives the Reserve Bank greater confidence the Australian economy is withstanding the slowdown abroad," Polygenis said.
"The current market pricing for 100 basis points (rate cut) is still looking a little bit overtly optimistic.
A majority of the 18 economists surveyed last week expect the RBA to cut interest rates by 75 basis points, which would take the cash rate to 4.5 per cent for the first time since June 2002.
JPMorgan economist Helen Kevans said the latest business indicator data would not affect the outcome of the Reserve Bank of Australia's interest rate decision on Tuesday.
"The data was for a period that ended two months ago, and RBA officials probably will put more weight on more recent partial data," said Kevans, who expects a 75 basis point rate cut.
A 19.4 per cent rise in mining profits for the September quarter, bouyed by higher coal and iron ore contract prices, were a big driver of the jump in company gross operating profits.
Profits were strong in the wholesale trade and other industries sector, posting a rise of 8.5 per cent, but they fell in manufacturing, retail trade and transport and storage.
An economist with nabCapital, Spiro Papadopoulos, said the business indicator data would not change the projected pace of gross domestic product growth for the September quarter, due out on Wednesday.
