United States banking giant Citigroup (NYSE: C – news) reported a big jump in quarterly earnings Thursday, as lower expenses more than compensated for weakness in bond trading and a few other businesses.
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Today, Citigroup Inc., stated net income for the third quarter 2015 of $4.3 billion, or $1.35 per diluted share, on revenues of $18.7 billion.
Profit of $1.31 a share, excluding adjustments to the value of outstanding loans, was higher than the average estimate of $1.27 a share from analysts in a Bloomberg survey.
Overall, Citi’s revenue was $18.5 billion after the accounting adjustment, compared with $20.06 billion the year before. That beat the $US1.28 expected by analysts polled by Thomson Reuters. The firm passed the Federal Reserve’s “stress tests” earlier this year and legal expenses this quarter were $376 billion, down from $1.6 billion a year earlier. On average, equities analysts expect that Citigroup will post $5.56 EPS for the current year. Guggenheim upgraded shares of Citigroup from a “neutral” rating to a “buy” rating and raised their price target for the stock from $53.44 to $53.48 in a research report on Friday, August 28th. The shares were acquired at an average cost of $50.16 per share, for a total transaction of $1,439,592.00.
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Trading revenue declined 10 percent on a slump in earnings from fixed-income products, worse than the roughly 5 percent drop Chief Financial Officer John Gerspach signaled on September 16. The Company operates in two segments: Citicorp, consisting of the Company’s Global Consumer Banking businesses and Institutional Clients Group, and Citi Holdings, consisting of Brokerage and Asset Management, Local Consumer Lending and Special Asset Pool. Advisory revenue fell 24%, debt underwriting dropped 17%, and equity underwriting tumbled 43%. But now that the bank has settled into a period of relative calm, a few analysts and investors are waiting to see if the bank has a game plan for consistent revenue growth even in a period of stricter regulations and low interest rates. That was largely because legal and related costs were down sharply, to $US376 million from $US1.55 billion a year ago, when the bank was preparing for an industry-wide settlement over the manipulation of foreign-exchange rates. The company said its bottom line advanced to $3.99 billion, or $1.31 per share. “So far this year we have returned over $4 billion of that capital to our shareholders in the form of share buybacks and common stock dividends”, Corbat concluded.
