Earnings Reports

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Citigroup starts off the banking sectors Q4 earnings with mixed results before the market open Monday. $C reports ahead of other money center banks Bank of America $BAC, JPMorgan Chase $JPM, Wells Fargo $WFCWells Fargo $WFC, PNC Financial $PNC 



Citigroup

Citigroup Inc NYSE: C · Reported Before Open Monday

$1.61 EPS Beat $1.55 Forecast BUT $17.1B Missed $17.56 billion forecast in revenue 

Earnings 

Citigroup Inc. (NYSE: C) reported that 4Q adjusted net profit rose to $4.2 billion or $1.61 per share from $3.7 billion or $1.28 per share in the year-ago quarter. Revenues dropped 2% year-over-year to $17.1 billion in the fourth quarter and came in below analysts’ forecast.

Consensus was for an adjusted EPS est. $1.55 (range $1.47 to $1.63) on adjusted revenue est. $17.56b (range $17.27b to $18.47b)  Analysts expect 4Q total trading rev. est. $2.88b with equities $671.9m. Estimates were for FICC $2.23b and an international banking rev. est. $1.18b  

C Earnings Q4 18

Analysts focus on the bank’s cost-ratio outlook for 2019.  With the recent market turmoil there will be eyes on variables including geopolitics, loan growth, capital markets revenue and expense outlooks. In early December Chief Financial Officer John Gerspach warned that Citi might post declines in fixed-income trading revenue for the last three months of the year, and cautioned that volatility may hinder 2018 targets.

Given that, in the conference call management’s take on the economy, global economic growth and the health of capital markets will be scrutinized. Indications about card margins and growth in North America retail banking with updates on the firm’s national digital bank and its growth prospects in Mexico and Asia are all key data points. Given the market risks and the Fed's so called more flexible policy look for investment banking pipeline talk and credit quality.

Bank stocks have rallied so far in 2019 after a dismal 2018. The KBW Bank Index is up over 5 percent this year ahead of the S&P 500’s gain of 3.4 percent. Last year the bank index was down near 20 percent. 

Citigroup Inc NYSE: C

Market Reaction Pre-market $55.95 −0.74 (1.31%) 

Highlights

  • Global Consumer Banking revenues $8.44 billion, flat year over year.
  • Institutional Clients Group revenues of $8.21 billion, a decrease of 1%.
  • Corporate/Other had revenues of $470 million, a decrease of 37%.
  • Citigroup  book value per share of $75.05 and a tangible book value per share of $53.79.
  • At quarter’s end, Citigroup’s CET1 Capital ratio was 11.9%, up from 11.7% in the prior quarter, driven by a reduction in risk-weighted assets.

During the quarter, the bank returned $5.8 billion of capital to common shareholders, which includes the repurchase of about 74 million shares.

“For 2019, we remain committed to delivering a 12% RoTCE and continuing to improve our operating efficiency during the year,” said Citi CEO Michael Corbat.

Citigroup Q3 Earnings Recap

$1.73 Beat Forecast $1.65 EPS BUT $18.39 Missed $18.46 billion forecast in revenue 

Earnings 

Citigroup Inc. (NYSE: C) reported EPS of $1.73 on revenue of $18.39 billion third-quarter results beating analysts’ consensus estimates of $1.65 in EPS but missing on revenue of $18.46 billion. Shares of Citigroup have a 52-week trading range is $64.38 to $80.70.

Citigroup Inc NYSE: C

Market Reaction Pre-market 70.35 +1.97 (2.88%)  

Highlights

      • Consumer banking revenue rose 2% to $8.65 billion
      • Though North America retail banking and branded card revenues fell.
      • Institutional clients revenue dipped 2% to $9.24 billion,
      • Fixed income revenue up 9% to $3.2 billion
      • Equity revenue up 1% to $792 million.
      • Investment banking revenue fell 8% to $1.2 billion.

C Earnings Q3 18

 

Caution hangs over the sector as auto and student loans also overhang the banking and finance sectors.  The new fall in home prices has challenged optimism for the mortgage business and banks profits thereto.

Source: Citigroup, Alphastreet

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