Earnings Preview : Citigroup Inc (NYSE:C) Third Quarter 2010
Thursday, September 30, 2010 10:07 AM

Citigroup Inc (NYSE:C) is scheduled to report its third quarter 2010 earnings results on October 18th, 2010, at 8 am EST.  Among the major banks, Citi's earnings are the most vulnerable to a weaker US economy given  the troubled  assets  still residing  in  its  run-off portfolios  (about  $485 billion  in  Citi Holdings).  While the first round of sales did not appear to hurt the stock, the government plans to sell its remaining 5.1 billion C shares (about 17% of total shares outstanding). This  new  supply,  coupled  with  renewed  economic  concerns,  could  result  in  continued underperformance.

On July 16, 2010, Citigroup reported a second-quarter profit of $0.09 per share, its second straight profitable quarter after a string of  quarterly  losses  dating  back  to  the  third  quarter  of  2007. Citigroup earned $0.14 per share in the previous quarter, but lost $0.56 per share in the year-ago quarter.  Citicorp,  the  ongoing  core  operations,  earned  $3.8  billion  in 2Q10, down from $5.1 billion in the previous quarter. Revenues of $16.5 billion were down 11%.  Total net credit losses of $8.0 billion were down from $8.4 billion in the previous quarter and  $11.5  billion  in  2Q09.  Additionally, nonaccrual assets fell 9% from the previous quarter and were down about  10% sequentially  in  the  previous quarter.

For the third quarter of 2010, the average earnings estimate for Citigroup is 7 cents per share.  The high estimate is 11 cents per share and the low estimate is 4 cents per share.  For the full year of 2010, the average analyst estimate is 39 cents per share, with a high estimate of 45 cents per share and a low estimate of 32 cents per share.  Average revenue estimates for the third quarter of 2010 are 21.38 billion dollars.  The high estimate is 23.16 billion dollars and the low estimate is 20.21 billion dollars.  Over the past 90 days the earnings estimate for Citigroup have grown by 17 percent from 6 cents per share to 7 cents per share.  Growth estimate for Citigroup for the current quarter are 125%, compare to -95% for the sector and 31% for the S&P 500.

Citigroup Inc., is currently trading at $3.91, which is in the middle of the 52 week range of 3.11 – 5.07.  Citigroup is trading at a price to earnings multiple of 33, and has debt of 238% of equity.  The EPS change from the prior quarter increased 112%.  Sales from the prior quarter were down 23% and the 3-year sales growth rate is down 15%.  The annual pre-tax margin for Citigroup is-10.2%.



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    Recent Estimates

AnalystFirm NameSymbolEPS Estimate
ja teremtipTTG Investments GE$0.28
markinsurace guru CINF$0.36