Citigroup Earnings: Investors APPLAUD Profitable Beat

S&P 500 (NYSE:SPY) component Citigroup Inc. (NYSE:C) posted a decrease in profit as revenue declined. Citigroup is a financial services holding company that provides corporations, governments, and consumers with a broad range of financial products and services.

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Citigroup Earnings Cheat Sheet for the Second Quarter

Results: Net income for the banks-major regional fell to $2.9 billion (95 cents per share) vs. $3.34 billion ($1.09 per share) a year earlier. This is a decline of 13.2% from the year-earlier quarter.

Revenue: Fell 32.1% to $18.64 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Citigroup Inc. beat the mean analyst estimate of 88 cents per share. Analysts were expecting revenue of $18.76 billion.

Quoting Management: Vikram Pandit, Citi’s Chief Executive Officer, said, “Our core businesses performed well in a difficult environment and are generating solid returns. We had strong growth in both loans and deposits, showed resilience in our markets-facing businesses, and saw record revenues in Transaction Services. We reduced Citi Holdings to approximately 10% of our balance sheet while our capital strength and liquidity continue to be among the best in the industry. We remain focused on execution, managing our expenses and our risk, and serving clients as only we can.”

Key Stats:

For four consecutive quarters, revenue has fallen. Revenue declined 4% to $26.3 billion in the first quarter. The figure fell 6.3% in the fourth quarter of the last fiscal year from the year earlier and dropped 0.3% in the third quarter of the last fiscal year from the year-ago quarter.

For three quarters in a row, the company’s net income has fallen. In the first quarter, net income fell 2.3% from the year earlier, while the figure fell 27% in the fourth quarter of the last fiscal year.

The company has now beaten estimates the last two quarters. In the first quarter, it topped expectations with net income of $1.11 versus a mean estimate of net income of $1.01 per share.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for third quarter has fallen from $1 per share to 95 cents. The average estimate for the fiscal year is now $3.84 per share, down from $4.06 sixty days ago.

Competitors to Watch: Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Company, Morgan Stanley, Barclays PLC, Goldman Sachs Group, Inc., U.S. Bancorp, UBS AG, Deutsche Bank AG, and Royal Bank of Scotland Group plc.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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