Earnings Preview: Citigroup (NYSE:C)
Monday, January 11, 2022 11:24 AM

Related Stories



Citigroup (C) is scheduled to report their fourth quarter 2009 results before the market opens on Tuesday, January 19, 2010. In the last four quarters, the bank's performance hasn't been consistent. In the last four quarters ending September 2009, the group reported earnings losses but for the second quarter. Moreover, the reported earnings were wide-off the market's consensus reflecting the difficulty in estimating the cashflows of the group.

Analysts' estimates for the fourth quarter range from a low of -$0.37 to a high of -$0.25, compared to a consensus estimate of -$0.325. According to Thomson Financial, for the fiscal quarter ending December 2009, the consensus EPS forecast has decreased over the past week from -$0.323 to -$0.325 (-0.62%) and decreased over the past month from -$0.059 to -$0.325 (-450.85%). Of the 13 analysts making quarterly forecasts, none raised and 16 lowered their forecast.

Downward revision in the estimates is attributable to a substantial decline in fixed income, currency and commodities trading in the fourth quarter of 2009.

In the last two years, Citigroup's fourth quarter revenue was well below the runrate in the other quarters. I don't see any reason to expect a trend reversal. In addition to the usual revenue figure, the group has been reporting managed revenue as well.

Citigroup's revenue in third quarter was $20.4 Billion while managed revenue was $23.1 Billion. Managed metrics are non-GAAP measures. Excluding a $1.4 billion gain from the impact of the exchange offers and the $11.1 billion Smith Barney gain on sale, managed revenues were stable versus the prior quarter. Completion of exchange offers resulted in an additional $64 billion of Tier 1 Common and $60 billion of Tangible Common Equity. As a result, Tangible Common Equity and Tier 1 Common ratios improved during the third quarter to 10.3% and 9.1%, respectively. Tier 1 Capital remained stable at 12.7%. Tangible book value per share was $4.47.

Looking more closely at Citi's individual businesses, fixed income market fourth quarter revenues are expected to be sequentially down close to 18.5%. The group's Rates and Currencies business is expected to show continued strength despite normalizing market conditions and its impact on trading opportunities. Transaction Services revenues are expected to be sequentially up by 3%. Citi Holdings is expected to sustain the good performance shown in the previous quarter.

Coming to expenses in the fourth quarter - higher compensation costs, primarily in Securities and Banking are likely to contribute to increasing expenses trend. Credit costs are likely to show a sequential lower trend. The overall loan loss reserve could stand at 5.9% of total loans, up from 5.85% in the third quarter.

The future for Citigroup looks slightly brighter now that they have completed their TARP repayment and the economy appears headed for real recovery. While the government still holds 34% of Citi's stock, they are expected to exit their stake over the next 12 months. In 2009, Citigroup's shares fell over 50% and underperformed the 19% gain in the Dow Jones industrial average. However, Citi's shares staged a massive recovery from their low of $.97 in early March and reached over $5 in August. I continue to expect the stock to hover around $5 for the next two quarters.

 

Sponsors

Symbol :

Advertisement

Market news:

  • US shoppers crowd malls all night long Nov 26, 2021 07:09 AM

    • Bargain shoppers, braving rain or frigid weather, crowded the nation's stores and malls in the wee hours of the night to get their hands on deals from TVs to toys on Black Friday.
    • In a bid to grab shoppers earlier on the traditional start to the holiday shopping season, a number of stores including Old Navy, Toys R Us and Sears opened on Thursday's Thanksgiving holiday.
    • Patricia Lopez, 32, a receptionist from Queens, N.Y., was in line at Toys R Us in New York's Times Square Thursday night.
      • NKorea warns region is on brink of war Nov 26, 2021 06:53 AM

        • YEONPYEONG ISLAND, South Korea - North Korea warned Friday that U.S.-South Korean plans for military maneuvers put the peninsula on the brink of war, and appeared to launch its own artillery drills within sight of an island it showered with a deadly barrage this week.
        • The fresh artillery blasts were especially defiant because they came as the U.S. commander in South Korea, Gen. Walter Sharp, toured the South Korean island to survey damage from Tuesday's hail of North Korean artillery fire that killed four people.
        • None of the latest rounds hit the South's territory, and U.S. military officials said Sharp did not even hear the concussions, though residents on other parts of the island panicked and ran back to the air raid shelters where they huddled earlier in the week as white smoke rose from North Korean territory.
          • Teenagers adrift in Pacific for 50 days reach land Nov 26, 2021 06:26 AM

            • SUVA, Fiji - Three teenage boys who spent 50 days adrift in a tiny boat in the South Pacific walked ashore on shaky legs Friday after their chance rescue - celebrated on their home island hundreds of miles (kilometers) away as a miracle that brought them back from the dead.
            • The trio - Samuel Pelesa and Filo Filo, both 15, and Edward Nasau, 14 - told rescuers they survived on rainwater they collected, a handful of coconuts, raw fish and a seagull that landed on their 12-foot- (3.5-meter-) long aluminum boat.
            • The boys set off Oct. 5 from their home island to one nearby.
              • Roll Tide! War Eagle! Alabama-Auburn stands apart Nov 26, 2021 05:57 AM

                • TUSCALOOSA, Ala. - They start early in this part of the country.
                • "You got to declare when you're a youngster," said Gene Stallings, the former Alabama coach.
                • "I'm prejudiced," said Pat Dye, who coached at Auburn for a dozen years, "but I don't think there's any other game in the country that's talked about on a daily basis as much as this one is by the folks in the state of Alabama."
                  • Black Friday shoppers crowd malls all night long Nov 26, 2021 05:55 AM

                    • After weeks of "Black Friday" sales pitches, the real thing is finally here.
                    • Many stores had trotted out the "Black Friday" label on sales as far back as October.
                    • In a bid to grab shoppers earlier, a number of stores including Old Navy, Toys R Us and Sears opened on Thanksgiving Day.

                      More news


Advertisement

    Recent Estimates

AnalystFirm NameSymbolEPS Estimate
GEOXXXXX PAY$0.31
mrbilltraderXXXXX POT$1.15
XXXXXXXXXX OVTI$0.43
sam farahanXXXXX TECD$0.95
XXXXXXXXXX GSS$0.05
XXXXXXXXXX ABB$0.31
adfgafg ERTS($0.26)
XXXXXXXXXX SD$0.03
XXXXXXXXXX ATML$0.11
XXXXXXXXXX CBPO$0.32