Citigroup Earnings: Here’s Why Shareholders are Disappointed

Citigroup, Inc. (NYSE:C) missed Wall Street’s profit estimate, AND came up short on beating the revenue expectation. Today’s quarterly earnings release is a negative sign to shareholders aiming to top analyst projections. Shares are down 3.11%.

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Citigroup, Inc. Earnings Cheat Sheet

Results: Net income increased 25.52% to $1.2 billion (38 cents per diluted share) in the quarter versus a net gain of $956 million in the year-earlier quarter.

Revenue: Decreased 19.1% to $18.7 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Citigroup, Inc. reported adjusted net income of 38 cents per share. By that measure, the company missed the mean analyst estimate of $0.96. It missed the average revenue estimate of $18.82 billion.

Quoting Management: “Our bottom line earnings reflect an environment that remains challenging- with businesses working through issues like spread compression and regulatory changes- as well as the costs of putting legacy issues behind us. However, we did make progress on several fronts…

…At 8.7%, we reached the target for our year-end Basel III Tier 1 Common ratio. We continue to have a very liquid balance sheet and a high-quality credit portfolio in our core businesses. It will take some time to work through the challenges of the current environment but realizing our core earnings potential, as well as improving our returns on assets and tangible equity, are critical goals going forward.” stated Michael Corbat, Citigroup’s CEO.

Key Stats:

Revenue decreased 16.67% from $22.44 billion in the previous quarter. Net income increased 156.41% from $468 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.22 to a profit $1.25. For the current year, the average estimate has moved down from a profit of $4.19 to a profit of $3.97 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)