Friday, January 18, 2013

Citigroup profit hit by more than $2 billion in charges

NEW YORK (Reuters) - Citigroup Inc posted $2.32 billion of charges for layoffs and lawsuits in the first financial report under its new chief executive, Michael Corbat, who cautioned that the bank needs more time to deal with the problems it faces.

Even with the charges, Citi on Thursday reported a higher fourth-quarter profit as trading revenue rebounded. But the result was well below Wall Street expectations, and the company's shares fell 3.4 percent in early trading.

Corbat, who took the reins in mid-October after predecessor Vikram Pandit was ousted, said in a statement that Citi's various businesses were combating competitive and regulatory problems, as well as issues dating to the financial crisis that continue to plague the bank and its peers.

"It will take some time to work through the challenges of the current environment," he said, adding that the bank's "critical goals" include improving its return on assets.

Citi shares rose in Corbat's first three months as CEO, outpacing peers, as some investors welcomed Pandit's departure and anticipated changes in the bank's structure. But analysts said estimates of future earnings are likely to be revised based on what the bank reported Thursday.

The quarter "falls way short of expectations" on two issues - higher-than-expected legal costs and no significant release of reserves for bad loans, Nomura analyst Glenn Schorr said in a note to clients.

Reuters Insider: Citi and Bank of America hit by charges: http://reut.rs/13mBR8u

PROFIT MISSES

Fourth-quarter net income was $1.2 billion, or 38 cents a share, compared with $956 million, or 31 cents a share, in same quarter of 2011.

Revenue from fixed income markets increased 58 percent, driving Citi's Securities and Banking segment back to profitability. Companywide revenue, adjusted for certain items, increased 8 percent, while operating expenses were unchanged.

Results were reduced by new legal costs of $1.29 billion, or 27 cents a share, and a previously announced corporate restructuring charge of $1.03 billion, or 21 cents a share.

On a conference call, Citigroup Chief Financial Officer John Gerspach said $500 million of the new legal costs came from what he called a variety of issues in the ongoing U.S. consumer banking business.

Expenses recorded for changes in the value of some of the bank's debt and obligations of derivatives counterparties were 10 cents a share, compared with 1 cent a year earlier.

Excluding the many one-time items, Citi said it earned 69 cents per share. On that basis, analysts polled by Thomson Reuters I/B/E/S on average expected 96 cents per share.

The operating earnings were 15 cents below the lowest of the 22 estimates that comprised the consensus forecast. It is the third year in a row that the bank's fourth-quarter results have missed Wall Street forecasts by at least 20 percent, according to Thomson Reuters data.

Citi shares fell $1.41 to $41.07 in early trading following the results. Through Wednesday's close, the shares had risen 16 percent in the three months since Corbat became CEO, against a 6 percent rise for the KBW banks index <.bkx>.

(Reporting by David Henry in New York; Writing by Ben Berkowitz; Editing by John Wallace)

Source: http://news.yahoo.com/citigroup-profit-hit-more-2-billion-charges-155051139--sector.html

george lucas billy the kid neville neville new hampshire primary hue jackson coachella 2012 line up

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.